UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-04526
Name of Registrant: | Vanguard Quantitative Funds |
Address of Registrant: | P.O. Box 2600 |
Valley Forge, PA 19482 | |
Name and address of agent for service: | Anne E. Robinson, Esquire |
P.O. Box 876 | |
Valley Forge, PA 19482 |
Registrant’s telephone number, including area code: (610) 669-1000
Date of fiscal year end: September 30
Date of reporting period: October 1, 2016 – September 30, 2017
Item 1: Reports to Shareholders
0448435, v0.49
Annual Report | September 30, 2017
Vanguard Growth and Income Fund
Vanguard’s Principles for Investing Success
We want to give you the best chance of investment success. These principles, grounded in Vanguard’s research and experience, can put you on the right path.
Goals. Create clear, appropriate investment goals.
Balance. Develop a suitable asset allocation using broadly diversified funds. Cost. Minimize cost.
Discipline. Maintain perspective and long-term discipline.
A single theme unites these principles: Focus on the things you can control.
We believe there is no wiser course for any investor.
Contents | |
Your Fund’s Performance at a Glance. | 1 |
Chairman’s Perspective. | 3 |
Advisors’ Report. | 7 |
Fund Profile. | 12 |
Performance Summary. | 14 |
Financial Statements. | 16 |
Your Fund’s After-Tax Returns. | 37 |
About Your Fund’s Expenses. | 38 |
Trustees Approve Advisory Arrangements. | 40 |
Glossary. | 42 |
Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promises
or advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of this
report. Of course, the risks of investing in your fund are spelled out in the prospectus.
See the Glossary for definitions of investment terms used in this report.
About the cover: Nautical images have been part of Vanguard’s rich heritage since its start in 1975. For an
incoming ship, a lighthouse offers a beacon and safe path to shore. You can similarly depend on Vanguard to put
you first––and light the way––as you strive to meet your financial goals. Our client focus and low costs,
stemming from our unique ownership structure, assure that your interests are paramount.
Your Fund’s Performance at a Glance
• The Vanguard Growth and Income Fund returned almost 18% for the 12 months ended September 30, 2017. It trailed its benchmark but exceeded the average return of its peers.
• The fund invests in U.S. large- and mid-capitalization stocks and seeks a total return greater than that of the Standard & Poor’s 500 Index. Three independent advisors manage the fund, each responsible for its own portfolio.
• In general, growth stocks outpaced their value counterparts during the fiscal year.
• All but two of the fund’s 11 industry sectors posted positive results, with financials, information technology, and industrials performing best.
• Energy, which ended the year in negative territory, was the fund’s weakest performer.
• For the ten years ended September 30, 2017, the fund’s average annual return trailed that of its benchmark but outpaced that of its peers.
Total Returns: Fiscal Year Ended September 30, 2017 | |
Total | |
Returns | |
Vanguard Growth and Income Fund | |
Investor Shares | 17.66% |
Admiral™ Shares | 17.81 |
S&P 500 Index | 18.61 |
Large-Cap Core Funds Average | 17.51 |
Large-Cap Core Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company. | |
Admiral Shares carry lower expenses and are available to investors who meet certain account-balance requirements. |
Total Returns: Ten Years Ended September 30, 2017 | |
Average | |
Annual Return | |
Growth and Income Fund Investor Shares | 6.77% |
S&P 500 Index | 7.44 |
Large-Cap Core Funds Average | 6.04 |
Large-Cap Core Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company. |
The figures shown represent past performance, which is not a guarantee of future results. (Current
performance may be lower or higher than the performance data cited. For performance data current to the
most recent month-end, visit our website at vanguard.com/performance.) Note, too, that both investment
returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more
or less than their original cost.
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Expense Ratios | |||
Your Fund Compared With Its Peer Group | |||
Investor | Admiral | Peer Group | |
Shares | Shares | Average | |
Growth and Income Fund | 0.34% | 0.23% | 1.07% |
The fund expense ratios shown are from the prospectus dated January 26, 2017, and represent estimated costs for the current fiscal year.
For the fiscal year ended September 30, 2017, the fund’s expense ratios were 0.34% for Investor Shares and 0.23% for Admiral Shares.
The peer-group expense ratio is derived from data provided by Lipper, a Thomson Reuters Company, and captures information through
year-end 2016.
Peer group: Large-Cap Core Funds.
2
Chairman’s Perspective
Bill McNabb
Chairman and Chief Executive Officer
Dear Shareholder,
Our investors depend on Vanguard to be a responsible steward of their assets. This includes our obvious responsibilities—managing the funds, offering investment perspectives and advice, and assisting with questions and transactions.
But because a long-term perspective informs every aspect of our investment approach, we also work on your behalf in less obvious ways, such as by advocating for responsible governance among the companies in which Vanguard funds invest. Vanguard’s index funds are essentially permanent owners of thousands of publicly traded companies, and we have a special obligation to be engaged stewards actively focused on the long term.
Simply put, we believe that well-governed companies are more likely to perform well over the long run.
Although Vanguard has always been an advocate for strong corporate governance, we have expanded our efforts recently as our investor base continues to grow. Our Investment Stewardship team has doubled in size since 2015, and we continue to add analysts, researchers, and operations team members. The team guides our engagement activities and our funds’ proxy voting by analyzing corporate governance practices in companies around the world.
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Our four Investment Stewardship pillars
As we evaluate company responsiveness to governance matters, including environmental and social concerns, we focus on four key areas—what we call our Investment Stewardship pillars:
• The board: A high-functioning, well-composed, independent, diverse, and experienced board with effective ongoing evaluation practices.
• Governance structures: Provisions and structures that empower shareholders and protect their rights.
• Appropriate compensation: Pay that incentivizes relative outperformance over the long term.
• Risk oversight: Effective, integrated, and ongoing oversight of relevant industry-and company-specific risks.
Guided by these pillars, our Investment Stewardship team conducted more than 950 engagements, or discussions, with company directors and leaders worldwide during the 12 months ended June 30, 2017.
Market Barometer | |||
Average Annual Total Returns | |||
Periods Ended September 30, 2017 | |||
One Year | Three Years | Five Years | |
Stocks | |||
Russell 1000 Index (Large-caps) | 18.54% | 10.63% | 14.27% |
Russell 2000 Index (Small-caps) | 20.74 | 12.18 | 13.79 |
Russell 3000 Index (Broad U.S. market) | 18.71 | 10.74 | 14.23 |
FTSE All-World ex US Index (International) | 19.49 | 5.11 | 7.35 |
Bonds | |||
Bloomberg Barclays U.S. Aggregate Bond Index | |||
(Broad taxable market) | 0.07% | 2.71% | 2.06% |
Bloomberg Barclays Municipal Bond Index | |||
(Broad tax-exempt market) | 0.87 | 3.19 | 3.01 |
Citigroup Three-Month U.S. Treasury Bill Index | 0.64 | 0.28 | 0.18 |
CPI | |||
Consumer Price Index | 2.23% | 1.22% | 1.30% |
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We also cast more than 171,000 votes on behalf of Vanguard funds at more than 18,000 shareholder meetings.
Gender diversity on boards and climate risk
As we engage with companies, we are devoting increased attention to two specific topics. The first is gender diversity on boards. It’s no secret that the right combination of talent, skills, and experience leads to better results, so we pay close attention to how company boards are structured and managed, and how they evolve.
In recent years, a growing body of research has demonstrated that greater diversity on boards can lead to improved governance and company performance. We are advocating for boards to incorporate diverse perspectives and experience into their strategic planning and decision-making. One example of our commitment to more diverse boards is our participation in the 30% Club, a global coalition working to increase the representation of women in boardrooms and leadership roles.
The second issue is climate risk. We will continue to engage with companies to understand their responses to this risk. Regardless of one’s perspective on the issue, the potential is real for changing regulations, demographics, and consumption behavior to affect business results for companies in many sectors.
We want to ensure that such business and regulatory risks are sufficiently disclosed so investors can value companies appropriately. In the past year, we have voted for shareholder proposals at several energy companies that called for management to improve its climate risk assessment and planning, and we will consider supporting similar proposals if we believe they are beneficial to long-term shareholder value. When a proposal from a shareholder presents a strong case for change, we’re more than willing to fully consider it. And even if the case falls short, these proposals often catalyze a discussion that generates meaningful change over time.
In addition to considering activists’ proposals, we consult research providers and our own network of experts. When we detect material risks to a company’s long-term value (such as bad leadership, poor disclosure, misaligned compensation structures, or threats to shareholder rights), we act with our voice and our vote.
Our stewardship reflects our mission
But we don’t act as independent agents with our own agenda. Every time we speak with a company chairman, CEO, or director, we’re acutely aware of the role we play in representing the economic interests of more than 20 million Vanguard investors. So you can expect us to speak out when we detect threats to the economic interests of our shareholders.
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We take positions on these matters not because they are inherently good or noble but because they are tied to the long-term economic value of your funds’ investments.
You trust us to represent your interests across the globe. You can be confident we act on that responsibility with the seriousness and dedication it deserves.
To learn more about our Investment Stewardship program, including how our funds have voted, visit https://about. vanguard.com/investment-stewardship/.
As always, thank you for investing with Vanguard.
Sincerely,
F. William McNabb III
Chairman and Chief Executive Officer
October 13, 2017
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Advisors’ Report
Vanguard Growth and Income Fund’s Investor Shares returned 17.66% for the 12 months ended September 30, 2017. The Admiral Shares returned 17.81%. The Standard & Poor’s 500 Index returned 18.61%, and the average return of large-capitalization core funds was 17.51%.
Your fund is managed by three independent advisors, a strategy that enhances the fund’s diversification by providing exposure to distinct yet complementary investment approaches. It is not uncommon for different advisors to have different views about individual securities or the broader investment environment.
The advisors, the percentage of fund assets each manages, and brief descriptions of their investment strategies are presented in the table below. The advisors have also prepared a discussion of the investment environment that existed during the fiscal year and of how the portfolio’s positioning reflects this assessment. (Please note that Los Angeles Capital’s discussion refers to industry sectors as defined by Russell classifications, rather than by the Global Industry Classification Standard used elsewhere in this report.) These comments were prepared on October 16, 2017.
Vanguard Growth and Income Fund Investment Advisors | |||
Fund Assets Managed | |||
Investment Advisor | % | $ Million | Investment Strategy |
Vanguard Quantitative Equity | 33 | 3,292 | Employs a quantitative fundamental management |
Group | approach, using models that assess valuation, growth | ||
prospects, management decisions, market | |||
sentiment, and earnings and balance-sheet quality of | |||
companies as compared with their peers. | |||
D. E. Shaw Investment | 33 | 3,266 | Employs quantitative models that seek to capture |
Management, L.L.C. | predominantly bottom-up stock-specific return | ||
opportunities. The portfolio’s sector weights, size, | |||
and style characteristics may differ modestly from the | |||
benchmark in a risk-controlled manner. | |||
Los Angeles Capital | 32 | 3,232 | Employs a quantitative model that emphasizes stocks |
with characteristics investors are currently seeking | |||
and underweights stocks with characteristics | |||
investors are currently avoiding. The portfolio’s sector | |||
weights, size, and style characteristics may differ | |||
modestly from the benchmark in a risk-controlled | |||
manner. | |||
Cash Investments | 2 | 207 | These short-term reserves are invested by Vanguard |
in equity index products to simulate investments in | |||
stocks. Each advisor also may maintain a modest | |||
cash position. |
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Vanguard Quantitative Equity Group
Portfolio Managers:
James P. Stetler
Binbin Guo, Principal, Head of Alpha
Equity Investments
Overall global economic growth, though uncertain and mixed at times, combined with rising corporate earnings to support a strong performance by the U.S. stock market. Stock valuations also climbed as investors embraced risk.
U.S. economic fundamentals remained firm behind favorable consumer confidence, unemployment, and GDP data. The Federal Reserve acknowledged the economy’s strength, pushing the range of its federal funds target rate to 1%–1.25% with hikes in March and June. The groundwork has been set, and the market is anticipating another rate increase in December and three more in 2018.
The broad U.S. equity market (as measured by the Russell 3000 Index) returned 18.71% for the period. Growth stocks outperformed their value counterparts, while small-cap stocks beat large-caps. U.S. stocks trailed their developed- and emerging-market peers.
Although overall performance is affected by macro factors, our approach to investing focuses on specific fundamentals. We believe that attractive stocks exhibit five key characteristics: high quality—healthy balance sheets and steady cash-flow generation; effective use of capital with
sound investment policies that favor internal over external funding; consistent earnings growth with the ability to grow earnings year after year; strong market sentiment; and reasonable valuation. The interaction of these characteristics generates an opinion on all stocks in our universe as our model seeks to capitalize on investor biases across the market.
Using these five themes, we generate a daily composite stock ranking, seeking to capitalize on market inefficiencies. We then monitor our portfolio and adjust when appropriate to maximize expected returns and minimize exposure to risks that our research indicates don’t improve returns (such as industry selection and other risks relative to the benchmark).
Over the period, our sentiment model contributed significantly to relative performance; quality and yields also made meaningful contributions. Management decisions was the only model that did not perform as expected. Our strongest sector results were in industrials, health care, and information technology. Our worst were in consumer discretionary and energy.
At the individual stock level, the largest contributions came from overweighted positions in NVIDIA, United Rentals, Applied Materials, and Alaska Air. Our portfolio also benefited from our underweight position in QUALCOMM. Overweight positions in Southwestern Energy, Newfield Exploration, Chesapeake Energy, Diamond Offshore Drilling, and Michael Kors hurt performance.
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We believe that our approach will benefit investors over the long term and feel that the fund offers a strong mix of stocks with attractive valuation and growth characteristics relative to its benchmark.
D. E. Shaw Investment
Management, L.L.C.
Portfolio Manager:
Philip Kearns, Ph.D., Managing Director
The S&P 500 rose strongly over the period, particularly after the U.S. presidential election. The rally was broad-based, with only one sector—telecommunications services—experiencing a negative return. The financial sector was the top performer, returning more than 36%. Nearly half of this gain occurred between the eve of the election and the end of 2016, as investors appeared to view Donald Trump’s electoral victory as a positive for the sector. This was perhaps because of expectations that a Trump administration would relax financial oversight and regulations. Global equity markets also performed well, with the MSCI World Index returning only slightly less than the S&P 500 Index and the MSCI Emerging Markets Index rising 22.49%.
The rally was accompanied by a significant decline in implied and realized volatility: The CBOE Volatility Index (VIX)—a measure of the expected volatility of the S&P 500—dropped to 9.36 in July, slightly above the record low it set in 1993. This index briefly spiked during the 12 months in an apparent reaction to some geopolitical
events; despite the global and domestic turmoil, however, realized volatility over the period was only 7.4%.
Although we monitor market activity of the type described above, we generally do not make investment decisions within benchmark-relative equity portfolios based on a subjective analysis of the investment environment. The only exception is when we attempt to mitigate certain situation-specific risks identified by the firm. There were no such occurrences of this during the period.
Our quantitative equity investment process deploys alpha models that seek to forecast individual stock returns, and it deploys risk models that seek to mitigate active exposures to industries, sectors, and common risk factors. However, the resulting portfolios may exhibit small to moderate active exposures to industries, sectors, and risk factors as a by-product of our focus on bottom-up stock selection. Therefore, we generally attribute portfolio performance to three major sources: bottom-up stock selection, exposure to industry groups, and risk factors such as value, growth, and market capitalization.
Stock selection contributed most to our portfolio’s performance over the period; exposures to macro and technical risks also contributed. Exposures to fundamental risks were the primary detractors. Our overweight exposure to small-cap stocks was a key contributor,
9
while an overweight exposure to stocks with low dollar trading volume was a significant, but smaller, detractor.
The three largest single-stock contributors were overweight positions in Apple and Lam Research and an underweight position in Allergan. The three largest single-stock detractors were underweight positions in Boeing and NVIDIA and a position in Bank of America that shifted from underweight to overweight during the period.
In our view, the U.S. economy appears to be expanding, albeit at a moderate pace. The U.S. Federal Reserve saw sufficient expansion of economic activity to warrant raising the federal funds rate in December, March, and June, and the unemployment rate recently matched its pre-recession low. While it’s likely that there will be further market-rattling shocks to come, we expect the economy to be resilient and to continue exhibiting modest growth.
Los Angeles Capital
Portfolio Managers:
Thomas D. Stevens, CFA,
Chairman and Principal
Hal W. Reynolds, CFA,
Chief Investment Officer and Principal
Against the backdrop of a dramatic reversal from value to growth, the Standard & Poor’s 500 Index ended the fiscal year substantially higher. In the last quarter of 2016, U.S. large value stocks outperformed growth
by almost 6%, thanks to an improved economic outlook. Then, despite low levels of market volatility during the first quarter of 2017, value’s momentum reversed as quickly as it had accelerated. A weaker dollar and strong fundamental momentum for the so-called FAANG (Facebook, Apple, Amazon, Netflix, and Alphabet’s Google) stocks drove the resurgence in growth stocks. Lower commodity prices and political uncertainty with regard to health care, tax reform, deregulation, and infrastructure spending also boosted the growth segment, as they hindered value stocks.
An analysis of equity factors over the trailing year shows that price momentum continues to be a dominant driver of return, with both one- and three-year momentum among the strongest factors. With the exception of dividend yield, which has underperformed as investors adjust their portfolios for higher interest rates, the performance of value factors was generally positive. Companies with a large proportion of non-dollar sales outperformed as the dollar weakened during the first half of 2017; so, too, did higher-quality companies with sustainable growth rates. Positive analyst sentiment, a factor generally favored by investors, underperformed as the improved outlook in fundamentals shifted from value back to growth.
Our portfolio’s tilt toward stocks with positive one-year momentum and exposure to financial risk added value,
10
while its underweight to stocks with the best long-term returns detracted as growth stocks regained their dominance. With growth assets rebounding strongly in 2017, the portfolio’s higher exposure to value factors at year-end also detracted from returns. For the year, the impact of the portfolio’s active sector bets was generally small. Overweights to technology and underweights to energy helped returns. Underweights to the larger-cap diversified financial firms, however, were the largest detractors.
As of September 30, our portfolio’s largest sector overweights are in technology and capital goods; its largest underweights are in retail and transportation. Over the 12 months, the portfolio shifted out of energy and real estate and into internet and capital goods. Its exposure to earnings growth and quality has increased while its exposure to value factors and financial risk has decreased. Today, it is positioned toward larger-cap companies that derive a high percentage of sales from foreign trade. The portfolio’s beta relative to the S&P 500 Index is 1.0.
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Growth and Income Fund
Fund Profile
As of September 30, 2017
Share-Class Characteristics | ||
Investor | Admiral | |
Shares | Shares | |
Ticker Symbol | VQNPX | VGIAX |
Expense Ratio1 | 0.34% | 0.23% |
30-Day SEC Yield | 1.54% | 1.65% |
Portfolio Characteristics | |||
DJ | |||
U.S. | |||
Total | |||
Market | |||
S&P 500 | FA | ||
Fund | Index | Index | |
Number of Stocks | 910 | 505 | 3,808 |
Median Market Cap | $82.5B | $92.1B | $61.4B |
Price/Earnings Ratio | 21.8x | 22.3x | 21.9x |
Price/Book Ratio | 3.1x | 3.0x | 2.9x |
Return on Equity | 16.0% | 16.0% | 15.1% |
Earnings Growth | |||
Rate | 9.5% | 9.3% | 9.6% |
Dividend Yield | 1.8% | 1.9% | 1.8% |
Foreign Holdings | 0.2% | 0.0% | 0.0% |
Turnover Rate | 96% | — | — |
Short-Term Reserves | 0.3% | — | — |
Sector Diversification (% of equity exposure) | |||
DJ | |||
U.S. Total | |||
S&P 500 | Market | ||
Fund | Index | FA Index | |
Consumer Discretionary 10.8% | 11.9% | 12.3% | |
Consumer Staples | 7.8 | 8.2 | 7.3 |
Energy | 5.7 | 6.1 | 5.8 |
Financials | 14.2 | 14.6 | 15.0 |
Health Care | 14.5 | 14.5 | 14.0 |
Industrials | 10.4 | 10.2 | 10.8 |
Information Technology | 25.8 | 23.2 | 22.3 |
Materials | 3.1 | 3.0 | 3.4 |
Real Estate | 3.1 | 3.0 | 4.0 |
Telecommunication | |||
Services | 1.7 | 2.2 | 2.0 |
Utilities | 2.9 | 3.1 | 3.1 |
Sector categories are based on the Global Industry Classification
Standard (“GICS”), except for the “Other” category (if applicable),
which includes securities that have not been provided a GICS
classification as of the effective reporting period.
Volatility Measures | ||
DJ | ||
U.S. Total | ||
S&P 500 | Market | |
Index | FA Index | |
R-Squared | 0.99 | 0.99 |
Beta | 0.97 | 0.96 |
These measures show the degree and timing of the fund’s
fluctuations compared with the indexes over 36 months.
1 The expense ratios shown are from the prospectus dated January 26, 2017, and represent estimated costs for the current fiscal year. For the
fiscal year ended September 30, 2017, the expense ratios were 0.34% for Investor Shares and 0.23% for Admiral Shares.
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Growth and Income Fund
Ten Largest Holdings (% of total net assets) | ||
Apple Inc. | Technology | |
Hardware, Storage & | ||
Peripherals | 4.0% | |
Alphabet Inc. | Internet Software & | |
Services | 2.9 | |
Microsoft Corp. | Systems Software | 2.3 |
Facebook Inc. | Internet Software & | |
Services | 1.8 | |
JPMorgan Chase & Co. | Diversified Banks | 1.5 |
Johnson & Johnson | Pharmaceuticals | 1.5 |
Amazon.com Inc. | Internet & Direct | |
Marketing Retail | 1.4 | |
Exxon Mobil Corp. | Integrated Oil & Gas | 1.3 |
Merck & Co. Inc. | Pharmaceuticals | 1.2 |
Bank of America Corp. | Diversified Banks | 1.2 |
Top Ten | 19.1% | |
The holdings listed exclude any temporary cash investments and | ||
equity index products. |
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Growth and Income Fund
Performance Summary
All of the returns in this report represent past performance, which is not a guarantee of future results that may be achieved by the fund. (Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.) Note, too, that both investment returns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth more or less than their original cost. The returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the sale of fund shares.
Cumulative Performance: September 30, 2007, Through September 30, 2017
Initial Investment of $10,000
Average Annual Total Returns | |||||
Periods Ended September 30, 2017 | |||||
Final Value | |||||
One | Five | Ten | of a $10,000 | ||
Year | Years | Years | Investment | ||
Growth and Income Fund*Investor | |||||
Shares | 17.66% | 14.27% | 6.77% | $19,258 | |
• • • • • • • • | S&P 500 Index | 18.61 | 14.22 | 7.44 | 20,488 |
– – – – | Large-Cap Core Funds Average | 17.51 | 12.66 | 6.04 | 17,979 |
Dow Jones U.S. Total Stock Market | |||||
Float Adjusted Index | 18.67 | 14.15 | 7.64 | 20,887 | |
Large-Cap Core Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company. |
Final Value | ||||
One | Five | Ten | of a $50,000 | |
Year | Years | Years | Investment | |
Growth and Income Fund Admiral Shares | 17.81% | 14.40% | 6.90% | $97,414 |
S&P 500 Index | 18.61 | 14.22 | 7.44 | 102,442 |
Dow Jones U.S. Total Stock Market Float | ||||
Adjusted Index | 18.67 | 14.15 | 7.64 | 104,435 |
See Financial Highlights for dividend and capital gains information.
14
Growth and Income Fund
Fiscal-Year Total Returns (%): September 30, 2007, Through September 30, 2017
15
Growth and Income Fund
Financial Statements
Statement of Net Assets
As of September 30, 2017
The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms N-Q on the SEC’s website at sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room (see the back cover of this report for further information).
Market | |||
Value• | |||
Shares | ($000) | ||
Common Stocks (97.7%)1 | |||
Consumer Discretionary (10.5%) | |||
* | Amazon.com Inc. | 141,987 | 136,499 |
Comcast Corp. Class A | 2,166,573 | 83,370 | |
Home Depot Inc. | 452,960 | 74,086 | |
McDonald’s Corp. | 430,410 | 67,437 | |
* | Priceline Group Inc. | 27,112 | 49,637 |
Walt Disney Co. | 441,141 | 43,483 | |
Yum! Brands Inc. | 507,415 | 37,351 | |
TJX Cos. Inc. | 455,126 | 33,556 | |
Carnival Corp. | 498,772 | 32,206 | |
Royal Caribbean | |||
Cruises Ltd. | 259,929 | 30,812 | |
Ross Stores Inc. | 349,964 | 22,597 | |
Best Buy Co. Inc. | 395,365 | 22,520 | |
General Motors Co. | 545,602 | 22,031 | |
* | Dollar Tree Inc. | 251,846 | 21,865 |
Lowe’s Cos. Inc. | 261,954 | 20,941 | |
* | Netflix Inc. | 114,272 | 20,723 |
Delphi Automotive plc | 189,547 | 18,651 | |
* | Discovery | ||
Communications Inc. | |||
Class A | 783,060 | 16,671 | |
H&R Block Inc. | 611,710 | 16,198 | |
Hasbro Inc. | 158,090 | 15,441 | |
Marriott International Inc. | |||
Class A | 136,124 | 15,009 | |
Coach Inc. | 351,139 | 14,144 | |
* | Mohawk Industries Inc. | 54,599 | 13,514 |
Omnicom Group Inc. | 171,103 | 12,674 | |
Wyndham Worldwide | |||
Corp. | 103,596 | 10,920 | |
* | Charter Communications | ||
Inc. Class A | 27,951 | 10,158 | |
Leggett & Platt Inc. | 211,605 | 10,100 | |
Darden Restaurants Inc. | 123,068 | 9,695 | |
Expedia Inc. | 66,821 | 9,618 | |
Wynn Resorts Ltd. | 55,390 | 8,249 |
Market | |||
Value• | |||
Shares | ($000) | ||
Ralph Lauren Corp. | |||
Class A | 87,310 | 7,709 | |
BorgWarner Inc. | 147,693 | 7,566 | |
Tiffany & Co. | 81,493 | 7,479 | |
DR Horton Inc. | 175,800 | 7,020 | |
News Corp. Class B | 483,175 | 6,595 | |
Twenty-First Century | |||
Fox Inc. | 255,209 | 6,582 | |
Genuine Parts Co. | 66,100 | 6,322 | |
Target Corp. | 107,038 | 6,316 | |
News Corp. Class A | 430,908 | 5,714 | |
Goodyear Tire & | |||
Rubber Co. | 169,200 | 5,626 | |
* | O’Reilly Automotive Inc. | 25,900 | 5,578 |
* | Michael Kors Holdings Ltd. | 113,115 | 5,413 |
PVH Corp. | 41,200 | 5,194 | |
* | LKQ Corp. | 127,600 | 4,592 |
Garmin Ltd. | 76,130 | 4,109 | |
Time Warner Inc. | 39,834 | 4,081 | |
Hilton Worldwide | |||
Holdings Inc. | 57,298 | 3,979 | |
* | Ulta Beauty Inc. | 15,167 | 3,429 |
Foot Locker Inc. | 94,560 | 3,330 | |
Starbucks Corp. | 60,403 | 3,244 | |
Ford Motor Co. | 258,827 | 3,098 | |
Dick’s Sporting Goods | |||
Inc. | 107,400 | 2,901 | |
* | Ferrari NV | 25,600 | 2,828 |
* | Visteon Corp. | 17,800 | 2,203 |
* | Sally Beauty Holdings Inc. | 110,300 | 2,160 |
* | Michaels Cos. Inc. | 91,400 | 1,962 |
Interpublic Group of Cos. | |||
Inc. | 84,715 | 1,761 | |
Cable One Inc. | 2,158 | 1,558 | |
Graham Holdings Co. | |||
Class B | 2,457 | 1,438 | |
* | Adtalem Global Education | ||
Inc. | 39,500 | 1,416 |
16
Growth and Income Fund | |||
Market | |||
Value• | |||
Shares | ($000) | ||
* | Liberty Media Corp-Liberty | ||
SiriusXM Class C Shares | 29,500 | 1,235 | |
Carter’s Inc. | 11,700 | 1,155 | |
* | Liberty Media Corp-Liberty | ||
SiriusXM Class A Shares | 26,500 | 1,110 | |
La-Z-Boy Inc. | 39,600 | 1,065 | |
Adient plc | 11,100 | 932 | |
GameStop Corp. Class A | 38,800 | 802 | |
* | Discovery Communications | ||
Inc. | 37,159 | 753 | |
* | Hyatt Hotels Corp. Class A | 11,900 | 735 |
Viacom Inc. Class B | 23,000 | 640 | |
^ | Restaurant Brands | ||
International Inc. | 10,000 | 639 | |
Gannett Co. Inc. | 62,335 | 561 | |
Brinker International Inc. | 15,700 | 500 | |
* | Express Inc. | 73,900 | 500 |
* | Crocs Inc. | 48,900 | 474 |
Office Depot Inc. | 98,400 | 447 | |
Bloomin’ Brands Inc. | 25,100 | 442 | |
* | Hilton Grand Vacations Inc. | 11,200 | 433 |
* | Liberty Expedia Holdings | ||
Inc. Class A | 7,481 | 397 | |
* | Lumber Liquidators | ||
Holdings Inc. | 9,900 | 386 | |
* | Liberty Ventures Class A | 6,700 | 386 |
Gentex Corp. | 17,938 | 355 | |
* | Wayfair Inc. | 5,200 | 350 |
* | Select Comfort Corp. | 10,900 | 338 |
Aaron’s Inc. | 6,500 | 284 | |
Signet Jewelers Ltd. | 3,000 | 200 | |
* | TripAdvisor Inc. | 3,900 | 158 |
* | ServiceMaster Global | ||
Holdings Inc. | 3,100 | 145 | |
* | NVR Inc. | 46 | 131 |
Lennar Corp. Class A | 2,300 | 121 | |
* | Liberty Interactive Corp. | ||
QVC Group Class A | 5,100 | 120 | |
Pier 1 Imports Inc. | 28,184 | 118 | |
* | La Quinta Holdings Inc. | 6,100 | 107 |
* | Kirkland’s Inc. | 6,800 | 78 |
* | Hibbett Sports Inc. | 5,161 | 74 |
* | Fossil Group Inc. | 7,800 | 73 |
Finish Line Inc. Class A | 6,000 | 72 | |
* | Liberty TripAdvisor Holdings | ||
Inc. Class A | 5,800 | 72 | |
Aramark | 1,600 | 65 | |
Bed Bath & Beyond Inc. | 2,600 | 61 | |
*,^ | Caesars Entertainment | ||
Corp. | 4,500 | 60 | |
American Eagle Outfitters | |||
Inc. | 4,200 | 60 | |
* | Horizon Global Corp. | 3,300 | 58 |
Big 5 Sporting Goods Corp. | 7,530 | 58 |
Market | ||||
Value• | ||||
Shares | ($000) | |||
* | Liberty Broadband Corp. | 600 | 57 | |
* | Live Nation Entertainment | |||
Inc. | 915 | 40 | ||
* | MDC Partners Inc. Class A | 3,500 | 39 | |
* | Liberty Media Corp-Liberty | |||
Formula One Class A | 1,000 | 36 | ||
Libbey Inc. | 3,900 | 36 | ||
* | Deckers Outdoor Corp. | 500 | 34 | |
* | Sotheby’s | 600 | 28 | |
Bassett Furniture Industries | ||||
Inc. | 689 | 26 | ||
* | Bridgepoint Education Inc. | 2,579 | 25 | |
* | Weight Watchers | |||
International Inc. | 500 | 22 | ||
Sirius XM Holdings Inc. | 3,800 | 21 | ||
* | Denny’s Corp. | 1,491 | 19 | |
New Media Investment | ||||
Group Inc. | 1,200 | 18 | ||
* | TRI Pointe Group Inc. | 1,000 | 14 | |
Ruth’s Hospitality Group | ||||
Inc. | 600 | 13 | ||
* | Groupon Inc. Class A | 2,400 | 12 | |
* | Monarch Casino & Resort | |||
Inc. | 300 | 12 | ||
* | Biglari Holdings Inc. | 34 | 11 | |
NIKE Inc. Class B | 200 | 10 | ||
Extended Stay America Inc. | 400 | 8 | ||
HSN Inc. | 200 | 8 | ||
L Brands Inc. | 140 | 6 | ||
* | Tuesday Morning Corp. | 1,190 | 4 | |
Cato Corp. Class A | 271 | 4 | ||
Gap Inc. | 100 | 3 | ||
* | Vitamin Shoppe Inc. | 300 | 2 | |
1,048,617 | ||||
Consumer Staples (7.5%) | ||||
Procter & Gamble Co. | 1,263,949 | 114,994 | ||
PepsiCo Inc. | 808,435 | 90,084 | ||
Wal-Mart Stores Inc. | 994,231 | 77,689 | ||
Philip Morris | ||||
International Inc. | 602,726 | 66,909 | ||
Coca-Cola Co. | 1,209,231 | 54,427 | ||
Altria Group Inc. | 778,790 | 49,391 | ||
Costco Wholesale Corp. | 287,635 | 47,256 | ||
Kimberly-Clark Corp. | 314,602 | 37,022 | ||
Conagra Brands Inc. | 978,156 | 33,003 | ||
Constellation Brands Inc. | ||||
Class A | 141,673 | 28,257 | ||
Colgate-Palmolive Co. | 381,316 | 27,779 | ||
Walgreens Boots Alliance | ||||
Inc. | 272,912 | 21,074 | ||
Campbell Soup Co. | 417,287 | 19,537 | ||
Hershey Co. | 171,712 | 18,746 | ||
CVS Health Corp. | 172,326 | 14,014 |
17
Growth and Income Fund | ||||
Market | ||||
Value• | ||||
Shares | ($000) | |||
Mondelez International Inc. | ||||
Class A | 271,265 | 11,030 | ||
Dr Pepper Snapple Group | ||||
Inc. | 107,276 | 9,491 | ||
Clorox Co. | 59,516 | 7,851 | ||
Molson Coors Brewing Co. | ||||
Class B | 81,710 | 6,671 | ||
Kroger Co. | 197,100 | 3,954 | ||
Kraft Heinz Co. | 43,500 | 3,373 | ||
* | US Foods Holding Corp. | 96,911 | 2,588 | |
Lamb Weston Holdings Inc. | 50,459 | 2,366 | ||
* | Post Holdings Inc. | 15,400 | 1,359 | |
Sysco Corp. | 24,712 | 1,333 | ||
General Mills Inc. | 18,915 | 979 | ||
* | Monster Beverage Corp. | 16,600 | 917 | |
Hormel Foods Corp. | 8,300 | 267 | ||
Ingredion Inc. | 2,100 | 253 | ||
* | Nomad Foods Ltd. | 17,292 | 252 | |
* | Pilgrim’s Pride Corp. | 5,900 | 168 | |
Coca-Cola European | ||||
Partners plc | 3,900 | 162 | ||
* | Adecoagro SA | 12,600 | 136 | |
* | Boston Beer Co. Inc. | |||
Class A | 400 | 62 | ||
* | HRG Group Inc. | 3,500 | 55 | |
* | United Natural Foods Inc. | 700 | 29 | |
* | USANA Health Sciences Inc. 400 | 23 | ||
* | Central Garden & Pet Co. | |||
Class A | 304 | 11 | ||
JM Smucker Co. | 105 | 11 | ||
Casey’s General Stores Inc. | 100 | 11 | ||
Dean Foods Co. | 200 | 2 | ||
753,536 | ||||
Energy (5.5%) | ||||
Exxon Mobil Corp. | 1,600,973 | 131,248 | ||
Chevron Corp. | 872,274 | 102,492 | ||
Halliburton Co. | 981,828 | 45,194 | ||
Schlumberger Ltd. | 549,880 | 38,360 | ||
Phillips 66 | 349,007 | 31,973 | ||
Baker Hughes a GE Co. | 643,213 | 23,554 | ||
Valero Energy Corp. | 289,395 | 22,263 | ||
ConocoPhillips | 441,063 | 22,075 | ||
Williams Cos. Inc. | 706,450 | 21,201 | ||
*,^ | Chesapeake Energy | |||
Corp. | 4,023,642 | 17,302 | ||
Marathon Petroleum | ||||
Corp. | 305,620 | 17,139 | ||
Kinder Morgan Inc. | 796,735 | 15,281 | ||
Anadarko Petroleum | ||||
Corp. | 310,200 | 15,153 | ||
Cabot Oil & Gas Corp. | 303,500 | 8,119 | ||
Devon Energy Corp. | 220,595 | 8,098 | ||
Cimarex Energy Co. | 52,971 | 6,021 | ||
EOG Resources Inc. | 44,099 | 4,266 |
Market | ||||
Value• | ||||
Shares | ($000) | |||
Andeavor | 35,200 | 3,631 | ||
EQT Corp. | 45,500 | 2,975 | ||
* | Newfield Exploration Co. | 89,600 | 2,658 | |
Occidental Petroleum | ||||
Corp. | 40,605 | 2,607 | ||
* | Energen Corp. | 46,600 | 2,548 | |
*,^ | Transocean Ltd. | 203,260 | 2,187 | |
Range Resources Corp. | 83,280 | 1,630 | ||
* | CONSOL Energy Inc. | 82,200 | 1,392 | |
Ensco plc Class A | 205,110 | 1,224 | ||
* | QEP Resources Inc. | 120,300 | 1,031 | |
Murphy Oil Corp. | 10,800 | 287 | ||
Cameco Corp. | 19,142 | 185 | ||
* | Peabody Energy Corp. | 5,800 | 168 | |
Oceaneering International | ||||
Inc. | 5,070 | 133 | ||
* | Exterran Corp. | 3,800 | 120 | |
* | Southwestern Energy Co. | 18,792 | 115 | |
* | Kosmos Energy Ltd. | 13,900 | 111 | |
Marathon Oil Corp. | 7,900 | 107 | ||
Golar LNG Ltd. | 4,704 | 106 | ||
* | Ultra Petroleum Corp. | 11,400 | 99 | |
* | Denbury Resources Inc. | 57,300 | 77 | |
* | Bonanza Creek Energy Inc. | 2,100 | 69 | |
Cosan Ltd. | 4,300 | 35 | ||
* | TechnipFMC plc | 1,212 | 34 | |
Archrock Inc. | 2,600 | 33 | ||
World Fuel Services Corp. | 900 | 31 | ||
Encana Corp. | 2,147 | 25 | ||
* | Diamond Offshore Drilling | |||
Inc. | 1,400 | 20 | ||
* | Matrix Service Co. | 1,300 | 20 | |
* | Helix Energy Solutions | |||
Group Inc. | 2,400 | 18 | ||
* | Basic Energy Services Inc. | 200 | 4 | |
* | Whiting Petroleum Corp. | 700 | 4 | |
Pioneer Natural Resources Co. 25 | 4 | |||
* | International Seaways Inc. | 100 | 2 | |
553,429 | ||||
Financials (13.8%) | ||||
JPMorgan Chase & Co. | 1,597,609 | 152,588 | ||
Bank of America Corp. | 4,799,732 | 121,625 | ||
Wells Fargo & Co. | 1,788,367 | 98,628 | ||
Citigroup Inc. | 1,338,226 | 97,343 | ||
* | Berkshire Hathaway Inc. | |||
Class B | 466,962 | 85,603 | ||
Goldman Sachs Group | ||||
Inc. | 228,615 | 54,225 | ||
S&P Global Inc. | 252,230 | 39,426 | ||
Morgan Stanley | 730,452 | 35,186 | ||
Bank of New York Mellon | ||||
Corp. | 646,415 | 34,273 | ||
Allstate Corp. | 339,218 | 31,178 | ||
Progressive Corp. | 601,123 | 29,106 |
18
Growth and Income Fund | |||
Market | |||
Value• | |||
Shares | ($000) | ||
Chubb Ltd. | 186,461 | 26,580 | |
State Street Corp. | 274,488 | 26,225 | |
Intercontinental Exchange | |||
Inc. | 360,386 | 24,759 | |
Aflac Inc. | 286,668 | 23,332 | |
Lincoln National Corp. | 305,820 | 22,472 | |
Zions Bancorporation | 475,245 | 22,422 | |
Everest Re Group Ltd. | 90,644 | 20,702 | |
T. Rowe Price Group Inc. | 226,343 | 20,518 | |
Ameriprise Financial Inc. | 137,782 | 20,462 | |
Citizens Financial Group | |||
Inc. | 530,741 | 20,099 | |
Regions Financial Corp. | 1,319,052 | 20,089 | |
Unum Group | 365,191 | 18,672 | |
Aon plc | 119,270 | 17,425 | |
Marsh & McLennan Cos. | |||
Inc. | 201,951 | 16,926 | |
M&T Bank Corp. | 102,000 | 16,426 | |
Franklin Resources Inc. | 351,605 | 15,650 | |
People’s United Financial | |||
Inc. | 792,019 | 14,367 | |
Discover Financial | |||
Services | 217,112 | 13,999 | |
US Bancorp | 238,645 | 12,789 | |
BlackRock Inc. | 28,550 | 12,764 | |
Leucadia National Corp. | 504,058 | 12,727 | |
American International | |||
Group Inc. | 206,000 | 12,646 | |
* | E*TRADE Financial Corp. | 283,490 | 12,363 |
Synchrony Financial | 383,400 | 11,905 | |
Moody’s Corp. | 82,100 | 11,429 | |
SunTrust Banks Inc. | 178,940 | 10,695 | |
MetLife Inc. | 187,379 | 9,734 | |
Torchmark Corp. | 112,587 | 9,017 | |
Navient Corp. | 595,225 | 8,940 | |
Hartford Financial | |||
Services Group Inc. | 157,255 | 8,717 | |
Willis Towers Watson plc | 55,600 | 8,575 | |
Comerica Inc. | 109,653 | 8,362 | |
CME Group Inc. | 56,300 | 7,639 | |
Raymond James Financial | |||
Inc. | 74,141 | 6,252 | |
XL Group Ltd. | 142,730 | 5,631 | |
Invesco Ltd. | 159,840 | 5,601 | |
Travelers Cos. Inc. | 44,981 | 5,511 | |
Principal Financial Group | |||
Inc. | 85,595 | 5,507 | |
Prudential Financial Inc. | 51,538 | 5,480 | |
American Express Co. | 52,420 | 4,742 | |
Voya Financial Inc. | 116,900 | 4,663 | |
Nasdaq Inc. | 54,700 | 4,243 | |
Huntington Bancshares | |||
Inc. | 295,132 | 4,120 |
Market | |||
Value• | |||
Shares | ($000) | ||
First Horizon National | |||
Corp. | 203,320 | 3,894 | |
Arthur J Gallagher & Co. | 54,551 | 3,358 | |
FNF Group | 59,300 | 2,814 | |
Cincinnati Financial Corp. | 29,531 | 2,261 | |
East West Bancorp Inc. | 35,800 | 2,140 | |
Fifth Third Bancorp | 75,480 | 2,112 | |
Affiliated Managers Group | |||
Inc. | 9,830 | 1,866 | |
First American Financial | |||
Corp. | 35,800 | 1,789 | |
Ares Capital Corp. | 108,800 | 1,783 | |
Northern Trust Corp. | 17,612 | 1,619 | |
* | Brighthouse Financial Inc. | 26,020 | 1,582 |
American Equity | |||
Investment Life | |||
Holding Co. | 29,800 | 867 | |
Credicorp Ltd. | 3,900 | 800 | |
* | Flagstar Bancorp Inc. | 14,400 | 511 |
Assured Guaranty Ltd. | 13,200 | 498 | |
Great Western Bancorp Inc. | 10,800 | 446 | |
Popular Inc. | 12,400 | 446 | |
TCF Financial Corp. | 21,500 | 366 | |
Primerica Inc. | 3,870 | 316 | |
* | First BanCorp | 57,900 | 296 |
First Midwest Bancorp Inc. | 12,016 | 281 | |
Reinsurance Group of | |||
America Inc. Class A | 2,000 | 279 | |
Apollo Investment Corp. | 42,700 | 261 | |
Argo Group International | |||
Holdings Ltd. | 4,200 | 258 | |
Beneficial Bancorp Inc. | 13,200 | 219 | |
LPL Financial Holdings Inc. | 4,000 | 206 | |
Synovus Financial Corp. | 3,800 | 175 | |
* | eHealth Inc. | 6,932 | 166 |
Aspen Insurance Holdings | |||
Ltd. | 3,900 | 158 | |
* | World Acceptance Corp. | 1,900 | 157 |
Old Republic International | |||
Corp. | 7,225 | 142 | |
Bank of NT Butterfield & | |||
Son Ltd. | 3,800 | 139 | |
Umpqua Holdings Corp. | 7,100 | 139 | |
Hanover Insurance Group | |||
Inc. | 1,400 | 136 | |
Columbia Banking System | |||
Inc. | 3,024 | 127 | |
Kearny Financial Corp. | 6,921 | 106 | |
Nelnet Inc. Class A | 1,900 | 96 | |
* | PHH Corp. | 6,300 | 88 |
UMB Financial Corp. | 1,100 | 82 | |
Meridian Bancorp Inc. | 4,000 | 75 | |
* | Green Dot Corp. Class A | 1,500 | 74 |
* | Opus Bank | 3,087 | 74 |
19
Growth and Income Fund | ||||
Market | ||||
Value• | ||||
Shares | ($000) | |||
* | Essent Group Ltd. | 1,600 | 65 | |
Erie Indemnity Co. Class A | 500 | 60 | ||
PacWest Bancorp | 1,100 | 56 | ||
^ | Prospect Capital Corp. | 7,400 | 50 | |
Brookline Bancorp Inc. | 3,200 | 50 | ||
Banner Corp. | 800 | 49 | ||
Preferred Bank | 788 | 48 | ||
Heritage Financial Corp. | 1,488 | 44 | ||
Employers Holdings Inc. | 888 | 40 | ||
Federated Investors Inc. | ||||
Class B | 1,300 | 39 | ||
CenterState Banks Inc. | 800 | 21 | ||
BGC Partners Inc. Class A | 1,400 | 20 | ||
Arbor Realty Trust Inc. | 2,461 | 20 | ||
Berkshire Hills Bancorp Inc. | 500 | 19 | ||
PNC Financial Services | ||||
Group Inc. | 127 | 17 | ||
* | Bancorp Inc. | 1,200 | 10 | |
* | Arch Capital Group Ltd. | 100 | 10 | |
Southwest Bancorp Inc. | 300 | 8 | ||
PJT Partners Inc. | 200 | 8 | ||
THL Credit Inc. | 807 | 8 | ||
Newtek Business Services | ||||
Corp. | 400 | 7 | ||
National General Holdings | ||||
Corp. | 300 | 6 | ||
Interactive Brokers Group Inc. | 100 | 5 | ||
Garrison Capital Inc. | 500 | 4 | ||
OFG Bancorp | 300 | 3 | ||
* | Donnelley Financial Solutions | |||
Inc. | 100 | 2 | ||
1,384,229 | ||||
Health Care (14.2%) | ||||
Johnson & Johnson | 1,125,548 | 146,332 | ||
Merck & Co. Inc. | 1,907,133 | 122,114 | ||
Pfizer Inc. | 2,285,017 | 81,575 | ||
Bristol-Myers Squibb | ||||
Co. | 1,206,824 | 76,923 | ||
AbbVie Inc. | 801,099 | 71,186 | ||
UnitedHealth Group Inc. | 325,713 | 63,791 | ||
* | Celgene Corp. | 434,736 | 63,393 | |
Eli Lilly & Co. | 708,485 | 60,604 | ||
Cigna Corp. | 274,827 | 51,376 | ||
Amgen Inc. | 248,441 | 46,322 | ||
Agilent Technologies Inc. | 641,640 | 41,193 | ||
Gilead Sciences Inc. | 495,845 | 40,173 | ||
Anthem Inc. | 204,736 | 38,875 | ||
Baxter International Inc. | 619,305 | 38,861 | ||
Medtronic plc | 478,395 | 37,205 | ||
* | Centene Corp. | 343,403 | 33,231 | |
Aetna Inc. | 187,764 | 29,856 | ||
Humana Inc. | 113,424 | 27,633 | ||
* | Vertex Pharmaceuticals | |||
Inc. | 167,277 | 25,433 |
Market | |||
Value• | |||
Shares | ($000) | ||
Danaher Corp. | 293,641 | 25,189 | |
* | Boston Scientific Corp. | 773,183 | 22,554 |
* | Mettler-Toledo | ||
International Inc. | 35,522 | 22,242 | |
* | Quintiles IMS Holdings Inc. | 199,186 | 18,937 |
* | IDEXX Laboratories Inc. | 119,474 | 18,577 |
Becton Dickinson and Co. | 94,073 | 18,434 | |
Thermo Fisher Scientific | |||
Inc. | 85,965 | 16,265 | |
* | HCA Healthcare Inc. | 192,889 | 15,352 |
McKesson Corp. | 92,958 | 14,279 | |
Allergan plc | 68,612 | 14,062 | |
Abbott Laboratories | 253,411 | 13,522 | |
* | Express Scripts Holding | ||
Co. | 165,678 | 10,491 | |
Cooper Cos. Inc. | 42,224 | 10,012 | |
* | DaVita Inc. | 156,100 | 9,271 |
Zoetis Inc. | 144,057 | 9,185 | |
* | Hologic Inc. | 197,200 | 7,235 |
* | Edwards Lifesciences | ||
Corp. | 62,670 | 6,850 | |
* | Alexion Pharmaceuticals | ||
Inc. | 48,672 | 6,828 | |
* | Waters Corp. | 36,803 | 6,607 |
* | Intuitive Surgical Inc. | 5,987 | 6,262 |
Patterson Cos. Inc. | 139,320 | 5,385 | |
* | Illumina Inc. | 22,343 | 4,451 |
* | Biogen Inc. | 13,885 | 4,348 |
* | Regeneron | ||
Pharmaceuticals Inc. | 8,941 | 3,998 | |
* | Myriad Genetics Inc. | 86,600 | 3,133 |
Universal Health Services | |||
Inc. Class B | 27,400 | 3,040 | |
Zimmer Biomet Holdings | |||
Inc. | 23,400 | 2,740 | |
* | Charles River Laboratories | ||
International Inc. | 25,000 | 2,700 | |
* | Portola Pharmaceuticals | ||
Inc. | 28,200 | 1,524 | |
* | Molina Healthcare Inc. | 20,700 | 1,423 |
Cardinal Health Inc. | 18,700 | 1,251 | |
* | Dynavax Technologies | ||
Corp. | 54,200 | 1,165 | |
Bruker Corp. | 39,100 | 1,163 | |
* | United Therapeutics Corp. | 9,000 | 1,055 |
* | Sangamo Therapeutics Inc. | 56,600 | 849 |
* | MyoKardia Inc. | 18,499 | 793 |
* | Alnylam Pharmaceuticals | ||
Inc. | 6,700 | 787 | |
* | AMAG Pharmaceuticals | ||
Inc. | 42,200 | 779 | |
* | PTC Therapeutics Inc. | 35,000 | 700 |
* | Intrexon Corp. | 29,300 | 557 |
* | Bioverativ Inc. | 9,368 | 535 |
20
Growth and Income Fund | |||
Market | |||
Value• | |||
Shares | ($000) | ||
* | LivaNova plc | 6,600 | 462 |
* | QIAGEN NV | 14,600 | 460 |
* | Amicus Therapeutics Inc. | 29,400 | 443 |
* | OraSure Technologies Inc. | 18,800 | 423 |
* | Depomed Inc. | 68,600 | 397 |
* | Momenta Pharmaceuticals | ||
Inc. | 20,100 | 372 | |
* | Laboratory Corp. of | ||
America Holdings | 2,300 | 347 | |
* | Insulet Corp. | 6,100 | 336 |
* | Puma Biotechnology Inc. | 2,800 | 335 |
* | BioMarin Pharmaceutical | ||
Inc. | 3,600 | 335 | |
* | Mylan NV | 10,600 | 332 |
* | Mallinckrodt plc | 8,300 | 310 |
* | INC Research Holdings Inc. | ||
Class A | 4,100 | 214 | |
* | Allscripts Healthcare | ||
Solutions Inc. | 12,300 | 175 | |
* | Ophthotech Corp. | 58,500 | 165 |
* | TherapeuticsMD Inc. | 25,300 | 134 |
*,^ | Rockwell Medical Inc. | 15,536 | 133 |
Owens & Minor Inc. | 3,900 | 114 | |
* | Triple-S Management Corp. | ||
Class B | 4,639 | 110 | |
* | Masimo Corp. | 1,200 | 104 |
* | Innoviva Inc. | 7,100 | 100 |
*,^ | Insys Therapeutics Inc. | 6,700 | 59 |
* | Medpace Holdings Inc. | 1,700 | 54 |
* | Spectrum Pharmaceuticals | ||
Inc. | 3,700 | 52 | |
* | Clovis Oncology Inc. | 600 | 49 |
* | BioCryst Pharmaceuticals | ||
Inc. | 8,700 | 46 | |
* | Enzo Biochem Inc. | 4,300 | 45 |
Invacare Corp. | 2,600 | 41 | |
* | AngioDynamics Inc. | 2,200 | 38 |
* | Quidel Corp. | 800 | 35 |
* | Amedisys Inc. | 600 | 34 |
* | Rigel Pharmaceuticals Inc. | 11,755 | 30 |
* | Concert Pharmaceuticals Inc. | 1,800 | 27 |
* | Incyte Corp. | 200 | 23 |
* | Arrowhead Pharmaceuticals | ||
Inc. | 4,800 | 21 | |
* | Diplomat Pharmacy Inc. | 900 | 19 |
* | Novus Therapeutics Inc. | 3,577 | 19 |
* | Magellan Health Inc. | 185 | 16 |
* | Chimerix Inc. | 2,634 | 14 |
* | Catalent Inc. | 300 | 12 |
* | Arbutus Biopharma Corp. | 1,600 | 10 |
* | Lexicon Pharmaceuticals Inc. | 740 | 9 |
* | Otonomy Inc. | 2,600 | 8 |
* | NanoString Technologies Inc. | 500 | 8 |
ResMed Inc. | 100 | 8 |
Market | |||
Value• | |||
Shares | ($000) | ||
Hill-Rom Holdings Inc. | 100 | 7 | |
* | Editas Medicine Inc. | 300 | 7 |
Dentsply Sirona Inc. | 100 | 6 | |
* | OvaScience Inc. | 4,000 | 6 |
* | Cardiovascular Systems Inc. | 200 | 6 |
* | NxStage Medical Inc. | 199 | 5 |
* | RTI Surgical Inc. | 802 | 4 |
* | Lantheus Holdings Inc. | 200 | 4 |
Luminex Corp. | 155 | 3 | |
* | Quality Systems Inc. | 200 | 3 |
* | AquaBounty Technologies | ||
Inc. | 371 | 3 | |
*,^ | CytRx Corp. | 5,500 | 2 |
* | ArQule Inc. | 1,800 | 2 |
* | Novavax Inc. | 1,500 | 2 |
* | Axovant Sciences Ltd. | 200 | 1 |
* | BioScrip Inc. | 300 | 1 |
1,417,146 | |||
Industrials (10.1%) | |||
Honeywell International | |||
Inc. | 520,764 | 73,813 | |
Boeing Co. | 228,001 | 57,960 | |
Deere & Co. | 361,497 | 45,400 | |
Waste Management Inc. | 577,134 | 45,172 | |
Lockheed Martin Corp. | 142,795 | 44,308 | |
Caterpillar Inc. | 345,950 | 43,143 | |
Raytheon Co. | 229,931 | 42,901 | |
Cummins Inc. | 231,478 | 38,895 | |
General Electric Co. | 1,517,552 | 36,694 | |
3M Co. | 174,613 | 36,651 | |
Emerson Electric Co. | 431,754 | 27,131 | |
Ingersoll-Rand plc | 298,908 | 26,654 | |
United Technologies Corp. | 217,120 | 25,203 | |
Rockwell Automation Inc. | 126,755 | 22,589 | |
Fortive Corp. | 300,171 | 21,249 | |
CSX Corp. | 388,339 | 21,071 | |
Masco Corp. | 527,867 | 20,592 | |
Southwest Airlines Co. | 361,800 | 20,254 | |
American Airlines Group | |||
Inc. | 424,335 | 20,152 | |
* | United Rentals Inc. | 142,978 | 19,837 |
United Parcel Service Inc. | |||
Class B | 161,869 | 19,439 | |
* | United Continental | ||
Holdings Inc. | 303,279 | 18,464 | |
Union Pacific Corp. | 155,900 | 18,080 | |
Northrop Grumman Corp. | 62,645 | 18,024 | |
Cintas Corp. | 112,890 | 16,288 | |
General Dynamics Corp. | 75,404 | 15,502 | |
Kansas City Southern | 112,944 | 12,275 | |
Eaton Corp. plc | 153,036 | 11,752 | |
Stanley Black & Decker Inc. | 77,483 | 11,698 | |
Spirit AeroSystems | |||
Holdings Inc. Class A | 149,200 | 11,596 |
21
Growth and Income Fund | |||
Market | |||
Value• | |||
Shares | ($000) | ||
Illinois Tool Works Inc. | 77,608 | 11,483 | |
KAR Auction Services Inc. | 197,000 | 9,405 | |
Delta Air Lines Inc. | 171,035 | 8,247 | |
Allegion plc | 94,899 | 8,206 | |
Allison Transmission | |||
Holdings Inc. | 212,405 | 7,972 | |
PACCAR Inc. | 110,118 | 7,966 | |
* | IHS Markit Ltd. | 174,995 | 7,714 |
L3 Technologies Inc. | 40,440 | 7,620 | |
FedEx Corp. | 32,583 | 7,350 | |
Johnson Controls | |||
International plc | 182,110 | 7,337 | |
Dun & Bradstreet Corp. | 62,240 | 7,245 | |
Pentair plc | 105,975 | 7,202 | |
Republic Services Inc. | |||
Class A | 91,803 | 6,065 | |
Roper Technologies Inc. | 23,344 | 5,682 | |
Fortune Brands Home & | |||
Security Inc. | 78,210 | 5,258 | |
Canadian Pacific Railway | |||
Ltd. | 30,800 | 5,175 | |
Fluor Corp. | 122,356 | 5,151 | |
Equifax Inc. | 39,919 | 4,231 | |
AMETEK Inc. | 56,799 | 3,751 | |
Xylem Inc. | 48,851 | 3,060 | |
Owens Corning | 34,900 | 2,700 | |
Parker-Hannifin Corp. | 15,420 | 2,699 | |
Jacobs Engineering | |||
Group Inc. | 35,360 | 2,060 | |
Arconic Inc. | 77,330 | 1,924 | |
Norfolk Southern Corp. | 14,211 | 1,879 | |
* | HD Supply Holdings Inc. | 47,800 | 1,724 |
Expeditors International of | |||
Washington Inc. | 26,300 | 1,574 | |
Old Dominion Freight Line | |||
Inc. | 13,887 | 1,529 | |
Nielsen Holdings plc | 27,810 | 1,153 | |
Timken Co. | 23,645 | 1,148 | |
Pitney Bowes Inc. | 74,801 | 1,048 | |
Dover Corp. | 10,900 | 996 | |
Carlisle Cos. Inc. | 9,802 | 983 | |
* | AerCap Holdings NV | 16,600 | 848 |
AO Smith Corp. | 12,477 | 742 | |
* | Continental Building | ||
Products Inc. | 27,400 | 712 | |
* | Quanta Services Inc. | 17,600 | 658 |
* | Moog Inc. Class A | 7,800 | 651 |
* | RPX Corp. | 45,800 | 608 |
* | Univar Inc. | 19,500 | 564 |
Hubbell Inc. Class B | 4,800 | 557 | |
Trinity Industries Inc. | 17,000 | 542 | |
* | Verisk Analytics Inc. | ||
Class A | 6,200 | 516 | |
BWX Technologies Inc. | 8,862 | 496 |
Market | |||
Value• | |||
Shares | ($000) | ||
* | Colfax Corp. | 9,899 | 412 |
JB Hunt Transport | |||
Services Inc. | 3,301 | 367 | |
Orbital ATK Inc. | 2,300 | 306 | |
* | AECOM | 8,100 | 298 |
Insperity Inc. | 3,069 | 270 | |
* | Armstrong World | ||
Industries Inc. | 5,228 | 268 | |
Crane Co. | 3,300 | 264 | |
Brady Corp. Class A | 6,900 | 262 | |
* | WABCO Holdings Inc. | 1,700 | 252 |
* | MRC Global Inc. | 11,500 | 201 |
* | YRC Worldwide Inc. | 13,145 | 181 |
* | Rexnord Corp. | 6,179 | 157 |
Albany International Corp. | 2,500 | 143 | |
* | Masonite International Corp. | 1,800 | 125 |
Oshkosh Corp. | 1,400 | 116 | |
Federal Signal Corp. | 5,102 | 109 | |
* | SPX FLOW Inc. | 2,800 | 108 |
Snap-on Inc. | 700 | 104 | |
* | Mistras Group Inc. | 4,186 | 86 |
* | TransUnion | 1,800 | 85 |
* | NCI Building Systems Inc. | 5,200 | 81 |
* | SPX Corp. | 2,754 | 81 |
EnerSys | 1,111 | 77 | |
Brink’s Co. | 749 | 63 | |
* | Civeo Corp. | 20,300 | 58 |
Covanta Holding Corp. | 3,620 | 54 | |
Huntington Ingalls | |||
Industries Inc. | 227 | 51 | |
Werner Enterprises Inc. | 1,400 | 51 | |
* | LB Foster Co. Class A | 2,100 | 48 |
* | Navigant Consulting Inc. | 2,800 | 47 |
* | ARC Document Solutions | ||
Inc. | 11,400 | 47 | |
Steelcase Inc. Class A | 2,900 | 45 | |
ArcBest Corp. | 1,200 | 40 | |
Briggs & Stratton Corp. | 1,600 | 38 | |
* | USG Corp. | 1,100 | 36 |
* | Kirby Corp. | 500 | 33 |
* | Armstrong Flooring Inc. | 2,060 | 32 |
* | TrueBlue Inc. | 1,400 | 31 |
* | Huron Consulting Group Inc. | 899 | 31 |
Knoll Inc. | 1,300 | 26 | |
* | Milacron Holdings Corp. | 1,500 | 25 |
* | Harsco Corp. | 1,200 | 25 |
Global Brass & Copper | |||
Holdings Inc. | 700 | 24 | |
Matson Inc. | 800 | 23 | |
* | JetBlue Airways Corp. | 1,100 | 20 |
* | TriNet Group Inc. | 600 | 20 |
* | Babcock & Wilcox | ||
Enterprises Inc. | 5,900 | 20 |
22
Growth and Income Fund | |||||
Market | |||||
Value• | |||||
Shares | ($000) | ||||
* | Kratos Defense & Security | ||||
Solutions Inc. | 1,400 | 18 | |||
* | Atkore International Group | ||||
Inc. | 800 | 16 | |||
* | FTI Consulting Inc. | 415 | 15 | ||
LSC Communications Inc. | 800 | 13 | |||
CH Robinson Worldwide Inc. | 137 | 10 | |||
Rockwell Collins Inc. | 79 | 10 | |||
* | Rush Enterprises Inc. Class A | 219 | 10 | ||
Ennis Inc. | 500 | 10 | |||
Watts Water Technologies | |||||
Inc. Class A | 100 | 7 | |||
Quad/Graphics Inc. | 300 | 7 | |||
* | CAI International Inc. | 200 | 6 | ||
* | Beacon Roofing Supply Inc. | 100 | 5 | ||
* | DXP Enterprises Inc. | 157 | 5 | ||
Spartan Motors Inc. | 300 | 3 | |||
* | Plug Power Inc. | 500 | 1 | ||
RR Donnelley & Sons Co. | 100 | 1 | |||
1,012,596 | |||||
Information Technology (25.2%) | |||||
Apple Inc. | 2,596,358 | 400,151 | |||
Microsoft Corp. | 3,061,896 | 228,081 | |||
* | Facebook Inc. Class A | 1,030,951 | 176,159 | ||
* | Alphabet Inc. Class A | 149,296 | 145,372 | ||
* | Alphabet Inc. Class C | 147,927 | 141,878 | ||
Visa Inc. Class A | 931,244 | 98,004 | |||
International Business | |||||
Machines Corp. | 624,300 | 90,573 | |||
Intel Corp. | 2,003,410 | 76,290 | |||
Broadcom Ltd. | 228,448 | 55,408 | |||
Mastercard Inc. Class A | 360,126 | 50,850 | |||
QUALCOMM Inc. | 940,963 | 48,780 | |||
Cisco Systems Inc. | 1,437,951 | 48,358 | |||
Applied Materials Inc. | 899,634 | 46,862 | |||
NVIDIA Corp. | 252,028 | 45,055 | |||
Texas Instruments Inc. | 448,370 | 40,192 | |||
HP Inc. | 1,880,514 | 37,535 | |||
* | VeriSign Inc. | 350,490 | 37,289 | ||
* | Adobe Systems Inc. | 245,476 | 36,620 | ||
DXC Technology Co. | 424,691 | 36,472 | |||
Lam Research Corp. | 185,895 | 34,398 | |||
Fidelity National | |||||
Information Services Inc. | 350,695 | 32,751 | |||
* | salesforce.com Inc. | 338,169 | 31,592 | ||
Accenture plc Class A | 220,281 | 29,753 | |||
Oracle Corp. | 612,485 | 29,614 | |||
* | Electronic Arts Inc. | 243,573 | 28,756 | ||
* | Synopsys Inc. | 350,116 | 28,195 | ||
Intuit Inc. | 187,287 | 26,621 | |||
Western Digital Corp. | 273,410 | 23,623 | |||
Symantec Corp. | 670,026 | 21,984 | |||
CSRA Inc. | 658,669 | 21,255 | |||
Juniper Networks Inc. | 750,856 | 20,896 |
Market | |||
Value• | |||
Shares | ($000) | ||
* | Cadence Design | ||
Systems Inc. | 496,353 | 19,591 | |
KLA-Tencor Corp. | 151,628 | 16,073 | |
Motorola Solutions Inc. | 188,285 | 15,980 | |
* | Advanced Micro Devices | ||
Inc. | 1,241,010 | 15,823 | |
Western Union Co. | 806,585 | 15,486 | |
Seagate Technology plc | 440,509 | 14,612 | |
* | PayPal Holdings Inc. | 223,455 | 14,308 |
* | eBay Inc. | 367,551 | 14,136 |
Harris Corp. | 102,639 | 13,515 | |
* | Micron Technology Inc. | 324,743 | 12,772 |
Analog Devices Inc. | 143,276 | 12,346 | |
* | F5 Networks Inc. | 96,626 | 11,649 |
NetApp Inc. | 261,770 | 11,455 | |
Cognizant Technology | |||
Solutions Corp. Class A | 139,800 | 10,141 | |
Activision Blizzard Inc. | 153,250 | 9,886 | |
Amphenol Corp. Class A | 112,433 | 9,516 | |
* | Citrix Systems Inc. | 119,470 | 9,178 |
Paychex Inc. | 151,472 | 9,082 | |
Total System Services Inc. | 135,964 | 8,906 | |
* | Autodesk Inc. | 79,267 | 8,898 |
Xilinx Inc. | 119,680 | 8,477 | |
CA Inc. | 252,149 | 8,417 | |
Corning Inc. | 279,875 | 8,374 | |
* | Teradata Corp. | 190,429 | 6,435 |
TE Connectivity Ltd. | 69,200 | 5,748 | |
* | CoreLogic Inc. | 122,200 | 5,648 |
Skyworks Solutions Inc. | 52,755 | 5,376 | |
FLIR Systems Inc. | 137,390 | 5,346 | |
* | Red Hat Inc. | 33,660 | 3,732 |
Versum Materials Inc. | 81,603 | 3,168 | |
* | BlackBerry Ltd. | 260,000 | 2,907 |
* | Fiserv Inc. | 21,631 | 2,790 |
* | First Data Corp. Class A | 119,900 | 2,163 |
Alliance Data Systems | |||
Corp. | 9,446 | 2,093 | |
* | SINA Corp. | 17,600 | 2,018 |
* | IAC/InterActiveCorp | 16,900 | 1,987 |
LogMeIn Inc. | 17,352 | 1,910 | |
* | Zynga Inc. Class A | 439,900 | 1,663 |
* | ANSYS Inc. | 13,288 | 1,631 |
Xerox Corp. | 42,905 | 1,428 | |
* | InterXion Holding NV | 25,600 | 1,304 |
* | Take-Two Interactive | ||
Software Inc. | 12,200 | 1,247 | |
Sabre Corp. | 68,600 | 1,242 | |
* | Microsemi Corp. | 23,700 | 1,220 |
* | Palo Alto Networks Inc. | 8,400 | 1,210 |
* | Dell Technologies Inc. | ||
Class V | 14,900 | 1,150 | |
Global Payments Inc. | 11,335 | 1,077 | |
* | Flex Ltd. | 57,100 | 946 |
23
Growth and Income Fund | |||
Market | |||
Value• | |||
Shares | ($000) | ||
Hewlett Packard Enterprise | |||
Co. | 52,500 | 772 | |
InterDigital Inc. | 9,900 | 730 | |
* | Kulicke & Soffa Industries | ||
Inc. | 28,600 | 617 | |
Genpact Ltd. | 21,400 | 615 | |
* | Cree Inc. | 20,600 | 581 |
Convergys Corp. | 21,700 | 562 | |
* | Ambarella Inc. | 11,000 | 539 |
* | ARRIS International plc | 17,000 | 484 |
* | VMware Inc. Class A | 4,030 | 440 |
* | MicroStrategy Inc. Class A | 3,401 | 434 |
* | Nuance Communications | ||
Inc. | 27,400 | 431 | |
* | Conduent Inc. | 24,700 | 387 |
Micro Focus International | |||
plc ADR | 11,617 | 371 | |
Maxim Integrated | |||
Products Inc. | 7,300 | 348 | |
* | Photronics Inc. | 32,300 | 286 |
* | Bankrate Inc. | 17,400 | 243 |
* | Synaptics Inc. | 5,200 | 204 |
Amdocs Ltd. | 2,407 | 155 | |
* | Rudolph Technologies Inc. | 5,793 | 152 |
Progress Software Corp. | 3,600 | 137 | |
* | CommScope Holding | ||
Co. Inc. | 3,800 | 126 | |
Vishay Intertechnology Inc. | 6,600 | 124 | |
* | Net 1 UEPS Technologies | ||
Inc. | 11,681 | 114 | |
Travelport Worldwide Ltd. | 5,754 | 90 | |
* | Shutterstock Inc. | 2,600 | 87 |
Dolby Laboratories Inc. | |||
Class A | 1,500 | 86 | |
* | Glu Mobile Inc. | 17,400 | 65 |
* | Alpha & Omega | ||
Semiconductor Ltd. | 3,900 | 64 | |
* | CommerceHub Inc. | 3,000 | 64 |
Teradyne Inc. | 1,600 | 60 | |
* | First Solar Inc. | 1,200 | 55 |
NVE Corp. | 682 | 54 | |
Science Applications | |||
International Corp. | 800 | 53 | |
* | TechTarget Inc. | 4,200 | 50 |
* | Qorvo Inc. | 700 | 49 |
* | Sonus Networks Inc. | 6,400 | 49 |
* | Rubicon Project Inc. | 12,100 | 47 |
NIC Inc. | 2,616 | 45 | |
* | CommVault Systems Inc. | 700 | 43 |
* | Calix Inc. | 8,061 | 41 |
Brooks Automation Inc. | 1,300 | 39 | |
* | Trimble Inc. | 998 | 39 |
* | Mellanox Technologies Ltd. | 800 | 38 |
* | Tower Semiconductor Ltd. | 1,200 | 37 |
Market | |||
Value• | |||
Shares | ($000) | ||
EVERTEC Inc. | 2,300 | 36 | |
* | XO Group Inc. | 1,821 | 36 |
* | Sykes Enterprises Inc. | 1,100 | 32 |
* | Zix Corp. | 6,500 | 32 |
* | Aspen Technology Inc. | 500 | 31 |
* | CommerceHub Inc. Class A | 1,350 | 30 |
* | Etsy Inc. | 1,800 | 30 |
* | Blucora Inc. | 1,200 | 30 |
* | DHI Group Inc. | 11,400 | 30 |
*,^ | MagnaChip Semiconductor | ||
Corp. | 2,500 | 28 | |
CDK Global Inc. | 400 | 25 | |
Leidos Holdings Inc. | 400 | 24 | |
* | EchoStar Corp. Class A | 400 | 23 |
* | TTM Technologies Inc. | 1,400 | 21 |
* | Endurance International | ||
Group Holdings Inc. | 2,413 | 20 | |
* | Euronet Worldwide Inc. | 200 | 19 |
* | Amkor Technology Inc. | 1,700 | 18 |
Daktronics Inc. | 1,200 | 13 | |
* | Rambus Inc. | 800 | 11 |
Microchip Technology Inc. | 100 | 9 | |
Plantronics Inc. | 200 | 9 | |
Hackett Group Inc. | 500 | 8 | |
* | 8x8 Inc. | 500 | 7 |
* | Bazaarvoice Inc. | 1,299 | 6 |
* | Care.com Inc. | 400 | 6 |
* | Web.com Group Inc. | 200 | 5 |
* | Barracuda Networks Inc. | 200 | 5 |
* | Yelp Inc. Class A | 100 | 4 |
* | KEMET Corp. | 200 | 4 |
* | Aerohive Networks Inc. | 1,000 | 4 |
* | Cimpress NV | 40 | 4 |
CPI Card Group Inc. | 3,100 | 4 | |
* | Extreme Networks Inc. | 300 | 4 |
* | Atlassian Corp. plc Class A | 100 | 3 |
* | Control4 Corp. | 100 | 3 |
* | Cornerstone OnDemand Inc. | 67 | 3 |
2,524,011 | |||
Materials (3.0%) | |||
Air Products & Chemicals | |||
Inc. | 258,018 | 39,017 | |
LyondellBasell Industries | |||
NV Class A | 259,513 | 25,705 | |
* | DowDuPont Inc. | 371,280 | 25,704 |
* | Freeport-McMoRan Inc. | 1,684,299 | 23,648 |
Albemarle Corp. | 144,602 | 19,711 | |
Praxair Inc. | 137,867 | 19,265 | |
Eastman Chemical Co. | 207,070 | 18,738 | |
Avery Dennison Corp. | 177,708 | 17,476 | |
Sealed Air Corp. | 390,935 | 16,701 | |
* | Owens-Illinois Inc. | 563,580 | 14,180 |
FMC Corp. | 138,044 | 12,329 | |
Newmont Mining Corp. | 310,960 | 11,664 |
24
Growth and Income Fund | ||||
Market | ||||
Value• | ||||
Shares | ($000) | |||
Ecolab Inc. | 70,614 | 9,082 | ||
PPG Industries Inc. | 67,964 | 7,385 | ||
Sherwin-Williams Co. | 14,623 | 5,236 | ||
Graphic Packaging | ||||
Holding Co. | 350,500 | 4,889 | ||
Chemours Co. | 65,100 | 3,295 | ||
Packaging Corp. of | ||||
America | 25,572 | 2,933 | ||
Mosaic Co. | 108,694 | 2,347 | ||
WR Grace & Co. | 31,100 | 2,244 | ||
International Flavors & | ||||
Fragrances Inc. | 14,790 | 2,114 | ||
WestRock Co. | 34,404 | 1,952 | ||
Monsanto Co. | 14,732 | 1,765 | ||
International Paper Co. | 19,417 | 1,103 | ||
Methanex Corp. | 19,470 | 979 | ||
* | Berry Global Group Inc. | 15,500 | 878 | |
Ferroglobe plc | 64,500 | 849 | ||
Reliance Steel & | ||||
Aluminum Co. | 10,300 | 784 | ||
Olin Corp. | 18,200 | 623 | ||
* | Louisiana-Pacific Corp. | 20,110 | 545 | |
Celanese Corp. Class A | 4,800 | 500 | ||
* | Alcoa Corp. | 10,400 | 485 | |
* | Coeur Mining Inc. | 46,900 | 431 | |
Steel Dynamics Inc. | 10,900 | 376 | ||
* | SunCoke Energy Inc. | 31,700 | 290 | |
* | Century Aluminum Co. | 16,800 | 278 | |
* | Constellium NV Class A | 22,200 | 227 | |
* | Axalta Coating Systems Ltd. | 4,800 | 139 | |
* | Cleveland-Cliffs Inc. | 18,800 | 134 | |
* | Crown Holdings Inc. | 2,000 | 119 | |
* | Allegheny Technologies Inc. | 4,000 | 96 | |
Warrior Met Coal Inc. | 3,900 | 92 | ||
Mercer International Inc. | 7,600 | 90 | ||
Tronox Ltd. Class A | 3,600 | 76 | ||
* | TimkenSteel Corp. | 3,300 | 54 | |
Schweitzer-Mauduit | ||||
International Inc. | 1,200 | 50 | ||
Worthington Industries Inc. | 900 | 41 | ||
KMG Chemicals Inc. | 493 | 27 | ||
* | Ryerson Holding Corp. | 1,900 | 21 | |
^ | Israel Chemicals Ltd. | 3,500 | 15 | |
Ashland Global Holdings Inc. | 200 | 13 | ||
Nucor Corp. | 100 | 6 | ||
Core Molding Technologies | ||||
Inc. | 200 | 4 | ||
Materion Corp. | 99 | 4 | ||
* | GCP Applied Technologies | |||
Inc. | 84 | 3 | ||
*,2 | Ferroglobe R&W Trust | 48,731 | — | |
296,712 |
Market | |||
Value• | |||
Shares | ($000) | ||
Other (0.2%) | |||
SPDR S&P 500 ETF Trust | 66,100 | 16,606 | |
*,2 | Safeway Inc. CVR (Casa Ley) | ||
Exp. 01/30/2018 | 75,810 | 10 | |
* | Rizzoli Corriere Della Sera | ||
Mediagroup SPA | 2,001 | 3 | |
*,2 | Safeway Inc. CVR (PDC) | ||
Exp. 01/30/2019 | 75,810 | — | |
16,619 | |||
Real Estate (3.1%) | |||
American Tower Corp. | 291,573 | 39,852 | |
Prologis Inc. | 568,548 | 36,080 | |
* | SBA Communications | ||
Corp. Class A | 185,024 | 26,653 | |
Equity Residential | 348,279 | 22,962 | |
Equinix Inc. | 36,740 | 16,397 | |
* | CBRE Group Inc. Class A | 381,300 | 14,444 |
Host Hotels & Resorts Inc. 769,902 | 14,235 | ||
Crown Castle International | |||
Corp. | 129,070 | 12,904 | |
Realogy Holdings Corp. | 383,422 | 12,634 | |
Iron Mountain Inc. | 321,847 | 12,520 | |
AvalonBay Communities | |||
Inc. | 68,355 | 12,196 | |
Apartment Investment & | |||
Management Co. | 233,450 | 10,239 | |
HCP Inc. | 352,900 | 9,821 | |
Digital Realty Trust Inc. | 64,464 | 7,628 | |
Essex Property Trust Inc. | 25,604 | 6,504 | |
UDR Inc. | 162,925 | 6,196 | |
Duke Realty Corp. | 214,900 | 6,193 | |
SL Green Realty Corp. | 50,144 | 5,081 | |
Weyerhaeuser Co. | 144,700 | 4,924 | |
Public Storage | 20,638 | 4,416 | |
Welltower Inc. | 54,027 | 3,797 | |
Simon Property Group Inc. | 21,466 | 3,456 | |
Equity LifeStyle Properties | |||
Inc. | 36,115 | 3,073 | |
GGP Inc. | 127,980 | 2,658 | |
Park Hotels & Resorts Inc. | 66,100 | 1,822 | |
* | Equity Commonwealth | 59,700 | 1,815 |
Spirit Realty Capital Inc. | 154,323 | 1,322 | |
Sun Communities Inc. | 14,000 | 1,199 | |
CoreCivic Inc. | 39,900 | 1,068 | |
Liberty Property Trust | 21,700 | 891 | |
Four Corners Property | |||
Trust Inc. | 32,469 | 809 | |
Columbia Property Trust | |||
Inc. | 26,393 | 575 | |
* | Quality Care Properties | ||
Inc. | 23,600 | 366 | |
Realty Income Corp. | 6,285 | 359 |
25
Growth and Income Fund | ||||
Market | ||||
Value• | ||||
Shares | ($000) | |||
Retail Properties of | ||||
America Inc. | 18,000 | 236 | ||
InfraREIT Inc. | 8,300 | 186 | ||
Highwoods Properties Inc. | 2,300 | 120 | ||
Outfront Media Inc. | 4,600 | 116 | ||
WP Carey Inc. | 1,200 | 81 | ||
American Assets Trust Inc. | 1,200 | 48 | ||
Colony NorthStar Inc. | ||||
Class A | 3,080 | 39 | ||
Paramount Group Inc. | 1,668 | 27 | ||
Community Healthcare | ||||
Trust Inc. | 900 | 24 | ||
Parkway Inc. | 983 | 23 | ||
Chesapeake Lodging Trust | 729 | 20 | ||
Forest City Realty Trust Inc. | ||||
Class A | 700 | 18 | ||
DDR Corp. | 1,500 | 14 | ||
Boston Properties Inc. | 100 | 12 | ||
Altisource Residential Corp. | 700 | 8 | ||
UMH Properties Inc. | 400 | 6 | ||
306,067 | ||||
Telecommunication Services (1.7%) | ||||
AT&T Inc. | 2,636,134 | 103,257 | ||
Verizon Communications | ||||
Inc. | 1,276,189 | 63,159 | ||
*,^ | Globalstar Inc. | 371,200 | 605 | |
* | Boingo Wireless Inc. | 15,800 | 338 | |
* | United States Cellular | |||
Corp. | 417 | 15 | ||
* | Zayo Group Holdings Inc. | 100 | 3 | |
167,377 | ||||
Utilities (2.9%) | ||||
PG&E Corp. | 636,160 | 43,316 | ||
NextEra Energy Inc. | 212,977 | 31,212 | ||
CenterPoint Energy Inc. | 1,010,934 | 29,529 | ||
Entergy Corp. | 333,301 | 25,451 | ||
American Electric Power | ||||
Co. Inc. | 329,821 | 23,167 | ||
FirstEnergy Corp. | 676,383 | 20,853 | ||
Ameren Corp. | 333,186 | 19,272 | ||
NRG Energy Inc. | 660,461 | 16,901 | ||
Xcel Energy Inc. | 234,145 | 11,080 | ||
Duke Energy Corp. | 119,981 | 10,069 | ||
Southern Co. | 132,275 | 6,500 | ||
Dominion Energy Inc. | 79,101 | 6,085 | ||
AES Corp. | 527,580 | 5,814 | ||
Pinnacle West Capital | ||||
Corp. | 61,690 | 5,217 | ||
Edison International | 66,436 | 5,127 | ||
Exelon Corp. | 134,434 | 5,064 |
Market | |||
Value• | |||
Shares | ($000) | ||
DTE Energy Co. | 33,219 | 3,566 | |
NiSource Inc. | 132,095 | 3,380 | |
PPL Corp. | 77,500 | 2,941 | |
Eversource Energy | 34,835 | 2,105 | |
CMS Energy Corp. | 40,737 | 1,887 | |
Westar Energy Inc. | |||
Class A | 36,999 | 1,835 | |
Consolidated Edison Inc. | 19,900 | 1,606 | |
WEC Energy Group Inc. | 20,185 | 1,267 | |
Public Service Enterprise | |||
Group Inc. | 22,000 | 1,018 | |
Alliant Energy Corp. | 23,100 | 960 | |
Avangrid Inc. | 8,595 | 408 | |
* | Atlantic Power Corp. | 99,700 | 244 |
Fortis Inc. | 2,200 | 79 | |
Chesapeake Utilities Corp. | 388 | 30 | |
* | Vistra Energy Corp. | 700 | 13 |
MGE Energy Inc. | 100 | 6 | |
Sempra Energy | 47 | 5 | |
Great Plains Energy Inc. | 100 | 3 | |
286,010 | |||
Total Common Stocks | |||
(Cost $8,207,897) | 9,766,349 | ||
Temporary Cash Investments (2.5%)1 | |||
Money Market Fund (2.4%) | |||
3,4 | Vanguard Market | ||
Liquidity Fund, 1.223% | 2,342,189 | 234,266 |
Face | |||
Amount | |||
($000) | |||
U.S. Government and Agency Obligations (0.1%) | |||
5 | United States Cash | ||
Management Bill, | |||
1.029%, 1/2/18 | 2,000 | 1,995 | |
United States Treasury Bill, | |||
1.023%, 10/5/17 | 150 | 150 | |
5 | United States Treasury Bill, | ||
1.033%%–1.038%, 11/2/17 | 4,150 | 4,146 | |
5 | United States Treasury Bill, | ||
1.056%, 11/24/17 | 5,000 | 4,993 | |
11,284 | |||
Total Temporary Cash Investments | |||
(Cost $245,514) | 245,550 | ||
Total Investments (100.2%) | |||
(Cost $8,453,411) | 10,011,899 |
26
Growth and Income Fund | |
Amount | |
($000) | |
Other Assets and Liabilities (-0.2%) | |
Other Assets | |
Investment in Vanguard | 483 |
Receivables for Investment Securities Sold 25,962 | |
Receivables for Accrued Income | 8,161 |
Receivables for Capital Shares Issued | 2,522 |
Variation Margin Receivable-Futures | |
Contracts | 721 |
Other Assets | 70 |
Total Other Assets | 37,919 |
Liabilities | |
Payables for Investment Securities | |
Purchased | (30,638) |
Collateral for Securities on Loan | (3,698) |
Payables to Investment Advisor | (1,681) |
Payables for Capital Shares Redeemed | (5,317) |
Payables to Vanguard | (11,618) |
Other Liabilities | (12) |
Total Liabilities | (52,964) |
Net Assets (100%) | 9,996,854 |
At September 30, 2017, net assets consisted of: | |
Amount | |
($000) | |
Paid-in Capital | 8,039,508 |
Undistributed Net Investment Income | 30,143 |
Accumulated Net Realized Gains | 364,497 |
Unrealized Appreciation (Depreciation) | |
Investment Securities | 1,558,488 |
Futures Contracts | 4,218 |
Net Assets | 9,996,854 |
Amount | |
($000) | |
Investor Shares—Net Assets | |
Applicable to 64,123,083 outstanding | |
$.001 par value shares of beneficial | |
interest (unlimited authorization) | 2,981,954 |
Net Asset Value Per Share— | |
Investor Shares | $46.50 |
Admiral Shares—Net Assets | |
Applicable to 92,387,321 outstanding | |
$.001 par value shares of beneficial | |
interest (unlimited authorization) | 7,014,900 |
Net Asset Value Per Share— | |
Admiral Shares | $75.93 |
• See Note A in Notes to Financial Statements.
* Non-income-producing security.
^ Includes partial security positions on loan to broker-dealers.
The total value of securities on loan is $3,228,000.
1 The fund invests a portion of its cash reserves in equity
markets through the use of index futures contracts. After
giving effect to futures investments, the fund’s effective
common stock and temporary cash investment positions
represent 99.9% and 0.3%, respectively, of net assets.
2 Security value determined using significant unobservable inputs.
3 Affiliated money market fund available only to Vanguard funds
and certain trusts and accounts managed by Vanguard. Rate
shown is the 7-day yield.
4 Includes $3,698,000 of collateral received for securities on loan.
5 Securities with a value of $8,489,000 have been segregated
as initial margin for open futures contracts.
ADR—American Depositary Receipt.
CVR—Contingent Value Rights.
Derivative Financial Instruments Outstanding as of Period End | ||||
Futures Contracts | ||||
($000) | ||||
Value and | ||||
Number of | Unrealized | |||
Long (Short) | Notional | Appreciation | ||
Expiration | Contracts | Amount | (Depreciation) | |
Long Futures Contracts | ||||
E-mini S&P 500 Index | December 2017 | 1,720 | 216,385 | 4,218 |
Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized
gain (loss) for tax purposes.
See accompanying Notes, which are an integral part of the Financial Statements.
27
Growth and Income Fund | |
Statement of Operations | |
Year Ended | |
September 30, 2017 | |
($000) | |
Investment Income | |
Income | |
Dividends1 | 154,513 |
Interest 2 | 2,266 |
Securities Lending—Net | 148 |
Total Income | 156,927 |
Expenses | |
Investment Advisory Fees—Note B | |
Basic Fee | 7,573 |
Performance Adjustment | 79 |
The Vanguard Group—Note C | |
Management and Administrative—Investor Shares | 6,137 |
Management and Administrative—Admiral Shares | 4,905 |
Marketing and Distribution—Investor Shares | 406 |
Marketing and Distribution—Admiral Shares | 289 |
Custodian Fees | 227 |
Auditing Fees | 27 |
Shareholders’ Reports and Proxy—Investor Shares | 268 |
Shareholders’ Reports and Proxy—Admiral Shares | 79 |
Trustees’ Fees and Expenses | 17 |
Total Expenses | 20,007 |
Net Investment Income | 136,920 |
Realized Net Gain (Loss) | |
Investment Securities Sold 2 | 418,979 |
Futures Contracts | 29,856 |
Realized Net Gain (Loss) | 448,835 |
Change in Unrealized Appreciation (Depreciation) | |
Investment Securities 2 | 613,347 |
Futures Contracts | 2,886 |
Change in Unrealized Appreciation (Depreciation) | 616,233 |
Net Increase (Decrease) in Net Assets Resulting from Operations | 1,201,988 |
1 Dividends are net of foreign withholding taxes of $7,000.
2 Interest income, realized net gain (loss), and change in unrealized appreciation (depreciation) from an affiliated company
of the fund were $2,199,000, $7,000, and $17,000, respectively.
See accompanying Notes, which are an integral part of the Financial Statements.
28
Growth and Income Fund | ||
Statement of Changes in Net Assets | ||
Year Ended September 30, | ||
2017 | 2016 | |
($000) | ($000) | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net Investment Income | 136,920 | 135,032 |
Realized Net Gain (Loss) | 448,835 | 315,955 |
Change in Unrealized Appreciation (Depreciation) | 616,233 | 413,592 |
Net Increase (Decrease) in Net Assets Resulting from Operations | 1,201,988 | 864,579 |
Distributions | ||
Net Investment Income | ||
Investor Shares | (53,480) | (53,764) |
Admiral Shares | (81,075) | (70,386) |
Realized Capital Gain1 | ||
Investor Shares | (131,717) | (152,494) |
Admiral Shares | (184,783) | (181,922) |
Total Distributions | (451,055) | (458,566) |
Capital Share Transactions | ||
Investor Shares | (112,815) | (67,371) |
Admiral Shares | 2,725,083 | 427,504 |
Net Increase (Decrease) from Capital Share Transactions | 2,612,268 | 360,133 |
Total Increase (Decrease) | 3,363,201 | 766,146 |
Net Assets | ||
Beginning of Period | 6,633,653 | 5,867,507 |
End of Period2 | 9,996,854 | 6,633,653 |
1 Includes fiscal 2017 and 2016 short-term gain distributions totaling $13,413,000 and $65,407,000, respectively. Short-term gain
distributions are treated as ordinary income dividends for tax purposes.
2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $30,143,000 and $27,778,000.
See accompanying Notes, which are an integral part of the Financial Statements.
29
Growth and Income Fund | |||||
Financial Highlights | |||||
Investor Shares | |||||
For a Share Outstanding | Year Ended September 30, | ||||
Throughout Each Period | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $42.16 | $39.55 | $42.69 | $36.02 | $30.73 |
Investment Operations | |||||
Net Investment Income | .7921 | . 852 | .729 | .671 | .631 |
Net Realized and Unrealized Gain (Loss) | |||||
on Investments | 6.346 | 4.813 | (.541) | 6.639 | 5.288 |
Total from Investment Operations | 7.138 | 5.665 | .188 | 7.310 | 5.919 |
Distributions | |||||
Dividends from Net Investment Income | (.799) | (.790) | (.724) | (. 640) | (. 629) |
Distributions from Realized Capital Gains | (1.999) | (2.265) | (2.604) | — | — |
Total Distributions | (2.798) | (3.055) | (3.328) | (.640) | (.629) |
Net Asset Value, End of Period | $46.50 | $42.16 | $39.55 | $42.69 | $36.02 |
Total Return2 | 17.66% | 14.79% | 0.22% | 20.42% | 19.54% |
Ratios/Supplemental Data | |||||
Net Assets, End of Period (Millions) | $2,982 | $2,801 | $2,691 | $2,979 | $2,869 |
Ratio of Total Expenses to Average Net Assets3 | 0.34% | 0.34% | 0.34% | 0.37% | 0.36% |
Ratio of Net Investment Income to | |||||
Average Net Assets | 1.80% | 2.09% | 1.70% | 1.67% | 1.90% |
Portfolio Turnover Rate | 96% | 96% | 116% | 133% | 109% |
1 Calculated based on average shares outstanding.
2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information
about any applicable account service fees.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.00%, 0.00%, 0.02%, and 0.01%.
See accompanying Notes, which are an integral part of the Financial Statements.
30
Growth and Income Fund | |||||
Financial Highlights | |||||
Admiral Shares | |||||
For a Share Outstanding | Year Ended September 30, | ||||
Throughout Each Period | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $68.83 | $64.57 | $69.71 | $58.82 | $50.18 |
Investment Operations | |||||
Net Investment Income | 1.3621 | 1.466 | 1.272 | 1.176 | 1.097 |
Net Realized and Unrealized Gain (Loss) | |||||
on Investments | 10.384 | 7.855 | (.897) | 10.833 | 8.633 |
Total from Investment Operations | 11.746 | 9.321 | .375 | 12.009 | 9.730 |
Distributions | |||||
Dividends from Net Investment Income | (1.384) | (1.364) | (1.264) | (1.119) | (1.090) |
Distributions from Realized Capital Gains | (3.262) | (3.697) | (4.251) | — | — |
Total Distributions | (4.646) | (5.061) | (5.515) | (1.119) | (1.090) |
Net Asset Value, End of Period | $75.93 | $68.83 | $64.57 | $69.71 | $58.82 |
Total Return2 | 17.81% | 14.91% | 0.31% | 20.55% | 19.69% |
Ratios/Supplemental Data | |||||
Net Assets, End of Period (Millions) | $7,015 | $3,833 | $3,177 | $2,917 | $2,157 |
Ratio of Total Expenses to Average Net Assets3 | 0.23% | 0.23% | 0.23% | 0.26% | 0.26% |
Ratio of Net Investment Income to | |||||
Average Net Assets | 1.91% | 2.20% | 1.81% | 1.78% | 2.00% |
Portfolio Turnover Rate | 96% | 96% | 116% | 133% | 109% |
1 Calculated based on average shares outstanding.
2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information
about any applicable account service fees.
3 Includes performance-based investment advisory fee increases (decreases) of 0.00%, 0.00%, 0.00%, 0.02%, and 0.01%.
See accompanying Notes, which are an integral part of the Financial Statements.
31
Growth and Income Fund
Notes to Financial Statements
Vanguard Growth and Income Fund is registered under the Investment Company Act of 1940 as an open-end investment company, or mutual fund. The fund offers two classes of shares: Investor Shares and Admiral Shares. Investor Shares are available to any investor who meets the fund’s minimum purchase requirements. Admiral Shares are designed for investors who meet certain administrative, service, and account-size criteria.
A. The following significant accounting policies conform to generally accepted accounting principles for U.S. investment companies. The fund consistently follows such policies in preparing its financial statements.
1. Security Valuation: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4 p.m., Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the fund’s pricing time but after the close of the securities’ primary markets, are valued by methods deemed by the board of trustees to represent fair value. Investments in Vanguard Market Liquidity Fund are valued at that fund’s net asset value. Temporary cash investments are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services.
2. Futures Contracts: The fund uses index futures contracts to a limited extent, with the objective of maintaining full exposure to the stock market while maintaining liquidity. The fund may purchase or sell futures contracts to achieve a desired level of investment, whether to accommodate portfolio turnover or cash flows from capital share transactions. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks held by the fund and the prices of futures contracts, and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance and requires daily settlement of variation margin representing changes in the market value of each contract.
Futures contracts are valued at their quoted daily settlement prices. The notional amounts of the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the contracts are recorded in the Statement of Net Assets as an asset (liability) and in the Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed, when they are recorded as realized futures gains (losses).
During the year ended September 30, 2017, the fund’s average investments in long and short futures contracts represented 3% and 0% of net assets, respectively, based on the average of the notional amounts at each quarter-end during the period.
3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for all open federal income tax years (September 30, 2014–2017), and has concluded that no provision for federal income tax is required in the fund’s financial statements.
32
Growth and Income Fund
4. Distributions: Distributions to shareholders are recorded on the ex-dividend date.
5. Securities Lending: To earn additional income, the fund lends its securities to qualified institutional borrowers. Security loans are subject to termination by the fund at any time, and are required to be secured at all times by collateral in an amount at least equal to the market value of securities loaned. Daily market fluctuations could cause the value of loaned securities to be more or less than the value of the collateral received. When this occurs, the collateral is adjusted and settled on the next business day. The fund further mitigates its counterparty risk by entering into securities lending transactions only with a diverse group of prequalified counterparties, monitoring their financial strength, and entering into master securities lending agreements with its counterparties. The master securities lending agreements provide that, in the event of a counterparty’s default (including bankruptcy), the fund may terminate any loans with that borrower, determine the net amount owed, and sell or retain the collateral up to the net amount owed to the fund; however, such actions may be subject to legal proceedings. While collateral mitigates counterparty risk, in the event of a default, the fund may experience delays and costs in recovering the securities loaned. The fund invests cash collateral received in Vanguard Market Liquidity Fund, and records a liability in the Statement of Net Assets for the return of the collateral, during the period the securities are on loan. Securities lending income represents fees charged to borrowers plus income earned on invested cash collateral, less expenses associated with the loan. During the term of the loan, the fund is entitled to all distributions made on or in respect of the loaned securities.
6. Credit Facility: The fund and certain other funds managed by The Vanguard Group (“Vanguard”) participate in a $3.1 billion committed credit facility provided by a syndicate of lenders pursuant to a credit agreement that may be renewed annually; each fund is individually liable for its borrowings, if any, under the credit facility. Borrowings may be utilized for temporary and emergency purposes, and are subject to the fund’s regulatory and contractual borrowing restrictions. The participating funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn amount of the facility; these fees are allocated to the funds based on a method approved by the fund’s board of trustees and included in Management and Administrative expenses on the fund’s Statement of Operations. Any borrowings under this facility bear interest at a rate based upon the higher of the one-month London Interbank Offered Rate, federal funds effective rate, or overnight bank funding rate plus an agreed-upon spread.
The fund had no borrowings outstanding at September 30, 2017, or at any time during the period then ended.
7. Other: Dividend income is recorded on the ex-dividend date. Interest income includes income distributions received from Vanguard Market Liquidity Fund and is accrued daily. Premiums and discounts on debt securities purchased are amortized and accreted, respectively, to interest income over the lives of the respective securities. Security transactions are accounted for on the date securities are bought or sold. Costs used to determine realized gains (losses) on the sale of investment securities are those of the specific securities sold.
Each class of shares has equal rights as to assets and earnings, except that each class separately bears certain class-specific expenses related to maintenance of shareholder accounts (included in Management and Administrative expenses), shareholder reporting, and the proxy. Marketing and distribution expenses are allocated to each class of shares based on a method approved by the board of trustees. Income, other non-class-specific expenses, and gains and losses on investments are allocated to each class of shares based on its relative net assets.
33
Growth and Income Fund
B. The investment advisory firms D. E. Shaw Investment Management, L.L.C., and Los Angeles Capital Management and Equity Research, Inc., each provide investment advisory services to a portion of the fund for a fee calculated at an annual percentage rate of average net assets managed by the advisor. The basic fee of D. E. Shaw Investment Management, L.L.C., is subject to quarterly adjustments based on performance relative to the S&P 500 Index for the preceding three years. The basic fee of Los Angeles Capital Management and Equity Research, Inc., is subject to quarterly adjustments based on performance relative to the S&P 500 Index for the preceding five years.
Vanguard provides investment advisory services to a portion of the fund as described below; the fund paid Vanguard advisory fees of $1,114,000 for the year ended September 30, 2017.
For the year ended September 30, 2017, the aggregate investment advisory fee represented an effective annual basic rate of 0.10% of the fund’s average net assets, before an increase of $79,000 (0.00%) based on performance.
C. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and the fund, Vanguard furnishes to the fund corporate management, administrative, marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These costs of operations are allocated to the fund based on methods and guidelines approved by the board of trustees. Vanguard does not require reimbursement in the current period for certain costs of operations (such as deferred compensation/benefits and risk/insurance costs); the fund’s liability for these costs of operations is included in Payables to Vanguard on the Statement of Net Assets.
Upon the request of Vanguard, the fund may invest up to 0.40% of its net assets as capital in Vanguard. At September 30, 2017, the fund had contributed to Vanguard capital in the amount of $483,000, representing 0.00% of the fund’s net assets and 0.19% of Vanguard’s capitalization. The fund’s trustees and officers are also directors and employees, respectively, of Vanguard.
D. Various inputs may be used to determine the value of the fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1—Quoted prices in active markets for identical securities.
Level 2—Other significant observable inputs (including quoted prices for similar securities, interest
rates, prepayment speeds, credit risk, etc.).
Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine
the fair value of investments). Any investments valued with significant unobservable inputs are
noted on the Statement of Net Assets.
The following table summarizes the market value of the fund’s investments as of September 30, 2017, based on the inputs used to value them:
Level 1 | Level 2 | Level 3 | |
Investments | ($000) | ($000) | ($000) |
Common Stocks | 9,766,336 | 3 | 10 |
Temporary Cash Investments | 234,266 | 11,284 | — |
Futures Contracts—Assets1 | 722 | — | — |
Total | 10,001,324 | 11,287 | 10 |
1 Represents variation margin on the last day of the reporting period. |
34
Growth and Income Fund
E. Distributions are determined on a tax basis and may differ from net investment income and realized capital gains for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain, or loss are recognized in different periods for financial statement and tax purposes. These differences will reverse at some time in the future. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
The fund used a tax accounting practice to treat a portion of the price of capital shares redeemed during the year as distributions from realized capital gains. Accordingly, the fund has reclassified $23,675,000 from accumulated net realized gains to paid-in capital.
For tax purposes, at September 30, 2017, the fund had $203,347,000 of ordinary income and $220,224,000 of long-term capital gains available for distribution.
At September 30, 2017, the cost of investment securities for tax purposes was $8,467,221,000. Net unrealized appreciation of investment securities for tax purposes was $1,544,678,000, consisting of unrealized gains of $1,637,774,000 on securities that had risen in value since their purchase and $93,096,000 in unrealized losses on securities that had fallen in value since their purchase.
F. During the year ended September 30, 2017, the fund purchased $9,133,674,000 of investment securities and sold $6,883,749,000 of investment securities, other than temporary cash investments.
G. Capital share transactions for each class of shares were: | ||||
Year Ended September 30, | ||||
2017 | 2016 | |||
Amount | Shares | Amount | Shares | |
($000) | (000) | ($000) | (000) | |
Investor Shares | ||||
Issued | 277,033 | 6,367 | 230,757 | 5,725 |
Issued in Lieu of Cash Distributions | 179,760 | 4,259 | 200,200 | 4,990 |
Redeemed | (569,608) | (12,950) | (498,328) | (12,298) |
Net Increase (Decrease)—Investor Shares | (112,815) | (2,324) | (67,371) | (1,583) |
Admiral Shares | ||||
Issued | 3,081,615 | 41,593 | 543,550 | 8,207 |
Issued in Lieu of Cash Distributions | 247,827 | 3,595 | 235,763 | 3,601 |
Redeemed | (604,359) | (8,482) | (351,809) | (5,325) |
Net Increase (Decrease)—Admiral Shares | 2,725,083 | 36,706 | 427,504 | 6,483 |
H. Management has determined that no material events or transactions occurred subsequent to
September 30, 2017, that would require recognition or disclosure in these financial statements.
35
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Vanguard Quantitative Funds and the Shareholders of Vanguard Growth and Income Fund
In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Vanguard Growth and Income Fund (constituting a separate portfolio of Vanguard Quantitative Funds, hereafter referred to as the “Fund”) as of September 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of September 30, 2017 by correspondence with the custodian and brokers and by agreement to the underlying ownership records of the transfer agent, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 13, 2017
Special 2017 tax information (unaudited) for Vanguard Growth and Income Fund
This information for the fiscal year ended September 30, 2017, is included pursuant to provisions of the Internal Revenue Code.
The fund distributed $317,856,000 as capital gain dividends (20% rate gain distributions) to shareholders during the fiscal year.
For nonresident alien shareholders, 100% of short-term capital gain dividends distributed by the fund are qualified short-term capital gains.
The fund distributed $141,428,000 of qualified dividend income to shareholders during the fiscal year.
For corporate shareholders, 46.6% of investment income (dividend income plus short-term gains, if any) qualifies for the dividends-received deduction.
36
Your Fund’s After-Tax Returns
This table presents returns for your fund both before and after taxes. The after-tax returns are shown in two ways: (1) assuming that an investor owned the fund during the entire period and paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s distributions and sold all shares at the end of each period.
Calculations are based on the highest individual federal income tax and capital gains tax rates in effect at the times of the distributions and the hypothetical sales. State and local taxes were not considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures and estimates for 2017. (In the example, returns after the sale of fund shares may be higher than those assuming no sale. This occurs when the sale would have produced a capital loss. The calculation assumes that the investor received a tax deduction for the loss.)
The table shows returns for Investor Shares only; returns for other share classes will differ. Please note that your actual after-tax returns will depend on your tax situation and may differ from those shown. Also note that if you own the fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not subject to current taxes.
Finally, keep in mind that a fund’s performance—whether before or after taxes—does not guarantee future results.
Average Annual Total Returns: Growth and Income Fund Investor Shares | |||
Periods Ended September 30, 2017 | |||
One | Five | Ten | |
Year | Years | Years | |
Returns Before Taxes | 17.66% | 14.27% | 6.77% |
Returns After Taxes on Distributions | 15.87 | 12.91 | 5.78 |
Returns After Taxes on Distributions and Sale of Fund Shares | 11.18 | 11.21 | 5.27 |
37
About Your Fund’s Expenses
As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The accompanying table illustrates your fund’s costs in two ways:
• Based on actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The ”Ending Account Value“ shown is derived from the fund‘s actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading ”Expenses Paid During Period.“
• Based on hypothetical 5% yearly return. This section is intended to help you compare your fund‘s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5% before expenses, but that the expense ratio is unchanged. In this case—because the return used is not the fund’s actual return—the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transaction costs incurred by the fund for buying and selling securities. Further, the expenses do not include any purchase, redemption, or account service fees described in the fund prospectus. If such fees were applied to your account, your costs would be higher. Your fund does not carry a “sales load.”
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
You can find more information about the fund’s expenses, including annual expense ratios, in the Financial Statements section of this report. For additional information on operating expenses and other shareholder costs, please refer to your fund’s current prospectus.
38
Six Months Ended September 30, 2017 | |||
Beginning | Ending | Expenses | |
Account Value | Account Value | Paid During | |
Growth and Income Fund | 3/31/2017 | 9/30/2017 | Period |
Based on Actual Fund Return | |||
Investor Shares | $1,000.00 | $1,074.73 | $1.72 |
Admiral Shares | 1,000.00 | 1,075.37 | 1.14 |
Based on Hypothetical 5% Yearly Return | |||
Investor Shares | $1,000.00 | $1,023.41 | $1.67 |
Admiral Shares | 1,000.00 | 1,023.97 | 1.12 |
The calculations are based on expenses incurred in the most recent six-month period. The fund’s annualized six-month expense ratios for
that period are 0.33% for Investor Shares and 0.22% for Admiral Shares. The dollar amounts shown as “Expenses Paid” are equal to the
annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent
six-month period, then divided by the number of days in the most recent 12-month period (183/365).
39
Trustees Approve Advisory Arrangements
The board of trustees of Vanguard Growth and Income Fund has renewed the fund’s investment advisory arrangements with D. E. Shaw Investment Management, L.L.C. (DESIM), Los Angeles Capital Management and Equity Research, Inc. (LA Capital), and The Vanguard Group, Inc. (Vanguard), through its Quantitative Equity Group. The board determined that renewing the fund’s advisory arrangements was in the best interest of the fund and its shareholders.
The board based its decision upon an evaluation of each advisor’s investment staff, portfolio management process, and performance. This evaluation included information provided to the board by Vanguard’s Portfolio Review Department, which is responsible for fund and advisor oversight and product management. The Portfolio Review Department met regularly with the advisors and made monthly presentations to the board during the fiscal year that directed the board’s focus to relevant information and topics.
The board, or an investment committee made up of board members, also received information throughout the year during advisor presentations. For each advisor presentation, the board was provided with letters and reports that included information about, among other things, the advisory firm and the advisor’s assessment of the investment environment, portfolio performance, and portfolio characteristics.
In addition, the board received monthly reports, which included a Market and Economic Report, a Fund Dashboard Monthly Summary, and a Fund Performance Report.
Prior to their meeting, the trustees were provided with a memo and materials that summarized the information they received over the course of the year. They also considered the factors discussed below, among others. However, no single factor determined whether the board approved the arrangements. Rather, it was the totality of the circumstances that drove the board’s decision.
Nature, extent, and quality of services
The board reviewed the quality of each advisor’s investment management services provided to the fund since 2011, and took into account the organizational depth and stability of each advisor. The board considered the following:
DESIM. Founded in 2005, DESIM is a global investment management and technology development firm. The advisor employs quantitative models that seek to capture predominantly “bottom-up” stock-specific return opportunities while aiming to control overall portfolio risk and characteristics, such as size, sector weights, and style, to be similar to those of the benchmark. DESIM focuses on return drivers that it considers “idiosyncratic,” or those that other quantitative managers tend to overlook, and de-emphasizes the use of traditional factors such as value, growth, and momentum, as these factors are more subject to crowding from other quantitative managers. DESIM has managed a portion of the fund since 2011.
LA Capital. LA Capital was formed in 2002 from the equity portion of Wilshire Asset Management. The advisor employs a controlled, dynamic investment model, gradually assigning new prices to key equity risks as market conditions evolve and investor preferences shift. The price of factor risk evolves over time in a way that can be captured in a model, similar to changes in cost of capital. The model uses more than 50 factors to actively weight stocks, including value, momentum, quality, sector, and market capitalization. The advisor applies statistical techniques to reduce noise in the factor returns and it looks for velocity and acceleration of the cleansed factor performance over the prior six months. LA Capital has managed a portion of the fund since 2011.
40
Vanguard. Vanguard has been managing investments for more than three decades. The Quantitative Equity Group adheres to a sound, disciplined investment management process; the team has considerable experience, stability, and depth. Vanguard has managed a portion of the fund since 2011.
The board concluded that each advisor’s experience, stability, depth, and performance, among other factors, warranted continuation of the advisory arrangements.
Investment performance
The board considered the fund’s investment performance since each advisor began managing the fund in 2011, including any periods of outperformance or underperformance compared with a relevant benchmark index and peer group. The board concluded that the performance was such that the advisory arrangements should continue. Information about the fund’s most recent performance can be found in the Performance Summary section of this report.
Cost
The board concluded that the fund’s expense ratio was well below the average expense ratio charged by funds in its peer group and that the fund’s advisory expense rates were also well below its peer-group average. Information about the fund’s expense ratio appears in the About Your Fund’s Expenses section of this report as well as in the Financial Statements section, which also includes information about the fund’s advisory expense rates.
The board did not consider the profitability of DESIM and LA Capital in determining whether to approve the advisory fees, because the firms are independent of Vanguard and the advisory fees are the result of arm’s-length negotiations. The board does not conduct a profitability analysis of Vanguard because of Vanguard’s unique “at-cost” structure. Unlike most other mutual fund management companies, Vanguard is owned by the funds it oversees and produces “profits” only in the form of reduced expenses for fund shareholders.
The benefit of economies of scale
The board concluded that the fund’s shareholders benefit from economies of scale because of breakpoints in the advisory fee schedules for DESIM and LA Capital. The breakpoints reduce the effective rate of the fee as the fund assets managed by each advisor increase. The board also concluded that the fund’s at-cost arrangement with Vanguard ensures that the fund will realize economies of scale as it grows, with the cost to shareholders declining as the fund assets managed by Vanguard increase.
The board will consider whether to renew the advisory arrangements again after a one-year period.
41
Glossary
30-Day SEC Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S. Securities and Exchange Commission. Under the formula, data related to the fund’s security holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that period, which is then annualized and divided by the fund’s estimated average net assets over the calculation period. For the purposes of this calculation, a security’s income is based on its current market yield to maturity (for bonds), its actual income (for asset-backed securities), or its projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized income, it will differ—at times significantly—from the fund’s actual experience. As a result, the fund’s income distributions may be higher or lower than implied by the SEC yield.
Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12% when the index rose or fell by 10%. For this report, beta is based on returns over the past 36 months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction with its R-squared (see definition). The lower the R-squared, the less correlation there is between the fund and the index, and the less reliable beta is as an indicator of volatility.
Dividend Yield. Dividend income earned by stocks, expressed as a percentage of the aggregate market value (or of net asset value, for a fund). The yield is determined by dividing the amount of the annual dividends by the aggregate value (or net asset value) at the end of the period. For a fund, the dividend yield is based solely on stock holdings and does not include any income produced by other investments.
Earnings Growth Rate. The average annual rate of growth in earnings over the past five years for the stocks now in a fund.
Equity Exposure. A measure that reflects a fund’s investments in stocks and stock futures. Any holdings in short-term reserves are excluded.
Expense Ratio. A fund’s total annual operating expenses expressed as a percentage of the fund’s average net assets. The expense ratio includes management and administrative expenses, but does not include the transaction costs of buying and selling portfolio securities.
Foreign Holdings. The percentage of a fund represented by securities or depositary receipts of companies based outside the United States.
Inception Date. The date on which the assets of a fund (or one of its share classes) are first invested in accordance with the fund’s investment objective. For funds with a subscription period, the inception date is the day after that period ends. Investment performance is measured from the inception date.
Median Market Cap. An indicator of the size of companies in which a fund invests; the midpoint of market capitalization (market price x shares outstanding) of a fund’s stocks, weighted by the proportion of the fund’s assets invested in each stock. Stocks representing half of the fund’s assets have market capitalizations above the median, and the rest are below it.
Price/Book Ratio. The share price of a stock divided by its net worth, or book value, per share. For a fund, the weighted average price/book ratio of the stocks it holds.
42
Price/Earnings Ratio. The ratio of a stock’s current price to its per-share earnings over the past year. For a fund, the weighted average P/E of the stocks it holds. P/E is an indicator of market expectations about corporate prospects; the higher the P/E, the greater the expectations for a company’s future growth.
R-Squared. A measure of how much of a fund’s past returns can be explained by the returns from the market in general, as measured by a given index. If a fund’s total returns were precisely synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based on returns over the past 36 months for both the fund and the index.
Return on Equity. The annual average rate of return generated by a company during the past five years for each dollar of shareholder’s equity (net income divided by shareholder’s equity). For a fund, the weighted average return on equity for the companies whose stocks it holds.
Short-Term Reserves. The percentage of a fund invested in highly liquid, short-term securities that can be readily converted to cash.
Turnover Rate. An indication of the fund’s trading activity. Funds with high turnover rates incur higher transaction costs and may be more likely to distribute capital gains (which may be taxable to investors). The turnover rate excludes in-kind transactions, which have minimal impact on costs.
43
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark
of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”), and is licensed for use
by Vanguard. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classification
makes any express or implied warranties or representations with respect to such standard or classification (or the results
to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy,
completeness, merchantability or fitness for a particular purpose with respect to any such standard or classification.
Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates or any third party involved in
making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive,
consequential or any other damages (including lost profits) even if notified of the possibility of such damages.
44
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The People Who Govern Your Fund
The trustees of your mutual fund are there to see that the fund is operated and managed in your best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard funds and provides services to them on an at-cost basis.
A majority of Vanguard’s board members are independent, meaning that they have no affiliation with Vanguard or the funds they oversee, apart from the sizable personal investments they have made as private individuals. The independent board members have distinguished backgrounds in business, academia, and public service. Each of the trustees and executive officers oversees 198 Vanguard funds.
Information for each trustee and executive officer of the fund appears below. The mailing address of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482. More information about the trustees is in the Statement of Additional Information, which can be obtained, without charge, by contacting Vanguard at 800-662-7447, or online at vanguard.com.
Interested Trustee1
F. William McNabb III
Born 1957. Trustee Since July 2009. Chairman of the Board. Principal Occupation(s) During the Past Five Years and Other Experience: Chairman of the Board of The Vanguard Group, Inc., and of each of the investment companies served by The Vanguard Group, since January 2010; Chief Executive Officer and Director of The Vanguard Group and President and Chief Executive Officer of each of the investment companies served by The Vanguard Group, since 2008; Director of Vanguard Marketing Corporation; President of The Vanguard Group (2008–2017); Managing Director of The Vanguard Group (1995–2008).
Independent Trustees
Emerson U. Fullwood
Born 1948. Trustee Since January 2008. Principal Occupation(s) During the Past Five Years and Other Experience: Executive Chief Staff and Marketing Officer for North America and Corporate Vice President (retired 2008) of Xerox Corporation (document management products and services);
Executive in Residence and 2009–2010 Distinguished Minett Professor at the Rochester Institute of Technology; Lead Director of SPX FLOW, Inc. (multi-industry manufacturing); Director of the United Way of Rochester, the University of Rochester Medical Center, Monroe Community College Foundation, North Carolina A&T University, and Roberts Wesleyan College; Trustee of the University of Rochester.
Rajiv L. Gupta
Born 1945. Trustee Since December 2001.2 Principal Occupation(s) During the Past Five Years and Other Experience: Chairman and Chief Executive Officer (retired 2009) and President (2006–2008) of Rohm and Haas Co. (chemicals); Director of Arconic Inc. (diversified manufacturer), HP Inc. (printer and personal computer manufacturing), and Delphi Automotive plc (automotive components); Senior Advisor at New Mountain Capital.
Amy Gutmann
Born 1949. Trustee Since June 2006. Principal Occupation(s) During the Past Five Years and Other Experience: President of the University of Pennsylvania; Christopher H. Browne
1 Mr. McNabb is considered an “interested person,” as defined in the Investment Company Act of 1940, because he is an officer of the
Vanguard funds.
2 December 2002 for Vanguard Equity Income Fund, the Vanguard Municipal Bond Funds, and the Vanguard State Tax-Exempt Funds.
Distinguished Professor of Political Science, School of Arts and Sciences, and Professor of Communication, Annenberg School for Communication, with secondary faculty appointments in the Department of Philosophy, School of Arts and Sciences, and at the Graduate School of Education, University of Pennsylvania; Trustee of the National Constitution Center.
JoAnn Heffernan Heisen
Born 1950. Trustee Since July 1998. Principal Occupation(s) During the Past Five Years and Other Experience: Corporate Vice President and Member of the Executive Committee (1997–2008), Chief Global Diversity Officer (retired 2008), Vice President and Chief Information Officer (1997–2006), Controller (1995–1997), Treasurer (1991–1995), and Assistant Treasurer (1989–1991) of Johnson & Johnson (pharmaceuticals/medical devices/ consumer products); Director of Skytop Lodge Corporation (hotels) and the Robert Wood Johnson Foundation; Member of the Advisory Board of the Institute for Women’s Leadership at Rutgers University.
F. Joseph Loughrey
Born 1949. Trustee Since October 2009. Principal Occupation(s) During the Past Five Years and Other Experience: President and Chief Operating Officer (retired 2009) of Cummins Inc. (industrial machinery); Chairman of the Board of Hillenbrand, Inc. (specialized consumer services), Oxfam America, and the Lumina Foundation for Education; Director of the V Foundation for Cancer Research; Member of the Advisory Council for the College of Arts and Letters and Chair of the Advisory Board to the Kellogg Institute for International Studies, both at the University of Notre Dame.
Mark Loughridge
Born 1953. Trustee Since March 2012. Principal Occupation(s) During the Past Five Years and Other Experience: Senior Vice President and Chief Financial Officer (retired 2013) at IBM (information technology services); Fiduciary Member of IBM’s Retirement Plan Committee (2004–2013); Member of the Council on Chicago Booth.
Scott C. Malpass
Born 1962. Trustee Since March 2012. Principal Occupation(s) During the Past Five Years and Other Experience: Chief Investment Officer and Vice President at the University of Notre Dame; Assistant Professor of Finance at the Mendoza College of Business at Notre Dame; Member of the Notre Dame 403(b) Investment Committee, the Board of Advisors for Spruceview Capital Partners, the Board of Catholic Investment Services, Inc. (investment advisor), and the Board of Superintendence of the Institute for the Works of Religion; Chairman of the Board of TIFF Advisory Services, Inc. (investment advisor).
André F. Perold
Born 1952. Trustee Since December 2004. Principal Occupation(s) During the Past Five Years and Other Experience: George Gund Professor of Finance and Banking, Emeritus at the Harvard Business School (retired 2011); Chief Investment Officer and Co-Managing Partner of HighVista Strategies LLC (private investment firm); Overseer of the Museum of Fine Arts Boston.
Peter F. Volanakis
Born 1955. Trustee Since July 2009. Principal Occupation(s) During the Past Five Years and Other Experience: President and Chief Operating Officer (retired 2010) of Corning Incorporated (communications equipment); Chairman of the Board of Trustees of Colby-Sawyer College; Member of the Board of Hypertherm, Inc. (industrial cutting systems, software, and consumables).
Executive Officers
Glenn Booraem
Born 1967. Investment Stewardship Officer Since February 2017. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Treasurer (2015–2017), Controller (2010–2015), and Assistant Controller (2001–2010) of each of the investment companies served by The Vanguard Group.
Thomas J. Higgins
Born 1957. Chief Financial Officer Since September 2008. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Chief Financial Officer of each of the investment companies served by The Vanguard Group; Treasurer of each of the investment companies served by The Vanguard Group (1998–2008).
Peter Mahoney
Born 1974. Controller Since May 2015. Principal Occupation(s) During the Past Five Years and Other Experience: Principal of The Vanguard Group, Inc.; Controller of each of the investment companies served by The Vanguard Group; Head of International Fund Services at The Vanguard Group (2008–2014).
Anne E. Robinson
Born 1970. Secretary Since September 2016. Principal Occupation(s) During the Past Five Years and Other Experience: Managing Director of The Vanguard Group, Inc.; General Counsel of The Vanguard Group; Secretary of The Vanguard Group and of each of the investment companies served by The Vanguard Group; Director and Senior Vice President of Vanguard Marketing Corporation; Managing Director and General Counsel of Global Cards and Consumer Services at Citigroup (2014–2016); Counsel at American Express (2003–2014).
Michael Rollings
Born 1963. Treasurer Since February 2017. Principal Occupation(s) During the Past Five Years and Other Experience: Managing Director of The Vanguard Group, Inc.; Treasurer of each of the investment companies served by The Vanguard Group; Director of Vanguard Marketing Corporation; Executive Vice President and Chief Financial Officer of MassMutual Financial Group (2006–2016).
Vanguard Senior Management Team | |
Mortimer J. Buckley | Chris D. McIsaac |
Gregory Davis | James M. Norris |
John James | Thomas M. Rampulla |
Martha G. King | Karin A. Risi |
John T. Marcante | |
Chairman Emeritus and Senior Advisor | |
John J. Brennan | |
Chairman, 1996–2009 | |
Chief Executive Officer and President, 1996–2008 | |
Founder | |
John C. Bogle | |
Chairman and Chief Executive Officer, 1974–1996 |
P.O. Box 2600 | |
Valley Forge, PA 19482-2600 | |
Connect with Vanguard® > vanguard.com | |
Fund Information > 800-662-7447 | CFA® is a registered trademark owned by CFA Institute. |
Direct Investor Account Services > 800-662-2739 | |
Institutional Investor Services > 800-523-1036 | |
Text Telephone for People | |
Who Are Deaf or Hard of Hearing> 800-749-7273 | |
This material may be used in conjunction | |
with the offering of shares of any Vanguard | |
fund only if preceded or accompanied by | |
the fund’s current prospectus. | |
All comparative mutual fund data are from Lipper, a | |
Thomson Reuters Company, or Morningstar, Inc., unless | |
otherwise noted. | |
You can obtain a free copy of Vanguard’s proxy voting | |
guidelines by visiting vanguard.com/proxyreporting or by | |
calling Vanguard at 800-662-2739. The guidelines are | |
also available from the SEC’s website, sec.gov. In | |
addition, you may obtain a free report on how your fund | |
voted the proxies for securities it owned during the 12 | |
months ended June 30. To get the report, visit either | |
vanguard.com/proxyreporting or sec.gov. | |
You can review and copy information about your fund at | |
the SEC’s Public Reference Room in Washington, D.C. To | |
find out more about this public service, call the SEC at | |
202-551-8090. Information about your fund is also | |
available on the SEC’s website, and you can receive | |
copies of this information, for a fee, by sending a | |
request in either of two ways: via email addressed to | |
publicinfo@sec.gov or via regular mail addressed to the | |
Public Reference Section, Securities and Exchange | |
Commission, Washington, DC 20549-1520. | |
© 2017 The Vanguard Group, Inc. | |
All rights reserved. | |
Vanguard Marketing Corporation, Distributor. | |
Q930 112017 |
Item 2: Code of Ethics. The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics was amended during the reporting period covered by this report to make certain technical, non-material changes.
Item 3: Audit Committee Financial Expert. All members of the Audit Committee have been determined by the Registrant’s Board of Trustees to be Audit Committee Financial Experts and to be independent: Rajiv L. Gupta, JoAnn Heffernan Heisen, F. Joseph Loughrey, Mark Loughridge, and Peter F. Volanakis.
Item 4: Principal Accountant Fees and Services.
(a) Audit Fees.
Audit Fees of the Registrant
Fiscal Year Ended September 30, 2017: $27,000
Fiscal Year Ended September 30, 2016: $69,000
Aggregate Audit Fees of Registered Investment Companies in the Vanguard Group.
Fiscal Year Ended September 30, 2017: $8,424,459
Fiscal Year Ended September 30, 2016: $9,629,849
Includes fees billed in connection with audits of the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc. and Vanguard Marketing Corporation.
(b) Audit-Related Fees.
Fiscal Year Ended September 30, 2017: $3,194,093
Fiscal Year Ended September 30, 2016: $2,717,627
Includes fees billed in connection with assurance and related services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
(c) Tax Fees.
Fiscal Year Ended September 30, 2017: $274,313
Fiscal Year Ended September 30, 2016: $254,050
Includes fees billed in connection with tax compliance, planning, and advice services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
0448435, v0.49
(d) All Other Fees.
Fiscal Year Ended September 30, 2017: $0
Fiscal Year Ended September 30, 2016: $214,225
Includes fees billed for services related to tax reported information provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
(e) (1) Pre-Approval Policies. The policy of the Registrant’s Audit Committee is to consider and, if appropriate, approve before the principal accountant is engaged for such services, all specific audit and non-audit services provided to: the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant. In making a determination, the Audit Committee considers whether the services are consistent with maintaining the principal accountant’s independence.
In the event of a contingency situation in which the principal accountant is needed to provide services in between scheduled Audit Committee meetings, the Chairman of the Audit Committee would be called on to consider and, if appropriate, pre-approve audit or permitted non-audit services in an amount sufficient to complete services through the next Audit Committee meeting, and to determine if such services would be consistent with maintaining the accountant’s independence. At the next scheduled Audit Committee meeting, services and fees would be presented to the Audit Committee for formal consideration, and, if appropriate, approval by the entire Audit Committee. The Audit Committee would again consider whether such services and fees are consistent with maintaining the principal accountant’s independence.
The Registrant’s Audit Committee is informed at least annually of all audit and non-audit services provided by the principal accountant to the Vanguard complex, whether such services are provided to: the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., or other entities controlled by The Vanguard Group, Inc. that provide ongoing services to the Registrant.
(2) No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) For the most recent fiscal year, over 50% of the hours worked under the principal accountant’s engagement were not performed by persons other than full-time, permanent employees of the principal accountant.
(g) Aggregate Non-Audit Fees.
Fiscal Year Ended September 30, 2017: $274,313
Fiscal Year Ended September 30, 2016: $468,275
0448435, v0.49
Includes fees billed for non-audit services provided to the Registrant, other registered investment companies in the Vanguard complex, The Vanguard Group, Inc., and Vanguard Marketing Corporation.
(h) For the most recent fiscal year, the Audit Committee has determined that the provision of all non-audit services was consistent with maintaining the principal accountant’s independence.
Item 5: Audit Committee of Listed Registrants.
Not Applicable.
Item 6: Investments.
Not Applicable.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not Applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not Applicable.
Item 9: Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not Applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 11: Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control Over Financial Reporting. There were no significant changes in Registrant’s Internal Control Over Financial Reporting or in other factors that could significantly affect this control subsequent to the date of the evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not Applicable.
Item 13: Exhibits.
(a) Code of Ethics.
(b) Certifications.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment | |
Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by | |
the undersigned, thereunto duly authorized. | |
| VANGUARD QUANTITATIVE FUNDS |
BY: | /s/ F. WILLIAM MCNABB III* |
F. WILLIAM MCNABB III | |
CHIEF EXECUTIVE OFFICER | |
Date: November 21, 2017 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment | |
Company Act of 1940, this report has been signed below by the following persons on behalf | |
of the registrant and in the capacities and on the dates indicated. | |
| VANGUARD QUANTITATIVE FUNDS |
BY: | /s/ F. WILLIAM MCNABB III* |
F. WILLIAM MCNABB III | |
CHIEF EXECUTIVE OFFICER | |
Date: November 21, 2017 | |
| VANGUARD QUANTITATIVE FUNDS |
BY: | /s/ THOMAS J. HIGGINS* |
THOMAS J. HIGGINS | |
CHIEF FINANCIAL OFFICER | |
Date: November 21, 2017 | |
* By: /s/ Anne E. Robinson | |
Anne E. Robinson, pursuant to a Power of Attorney filed on October 4, 2016 see file Number | |
33-32548, Incorporated by Reference. |
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